4. Business Operation of the Company & Its Subsidiary

4.1 History of The Company

Thai Carbon Black Public Co.,Ltd. was set up in 1978 as a Joint Venture
between the Adiya Birla Group of India and local Thai Investors to
manufacture Carbon Black, an important raw material for automobile tyre
and rubber industry. The company was established with initial registered
capital of Baht 500,000 and increased during the past years for the
expansion of capacity to the present level of Baht 300,000,000.

In the last 5 (five) years, the company has not increased its production
capacity and its current production capacity is 140,000 MT per year.
During the past 5 (five) years the company has not increased its share
capital which is Baht 300 million.

The company meets critical requirements of major tyre companies in
Thailand for Carbon Black. In addition, the company also export 49% of
Carbon Black production to several countries.

Our company does not have any holding company.

During the year, the company has won many prestigious international and
national awards for its excellent performance like Best Employer in
Thailand, 5^(th) Best Employer in Asia, Best performance award in the
industry category by Stock Exchange of Thailand, Outstanding Company for
Labor Relationship and Welfare Management by Labor Ministry, etc and
these awards are testimony to company’s excellent management systems
which helped the company to achieve competitive edge to market its
products efficiently and to serve its customer better.

Recently the company has also won the prestigious Thailand Quality Class
award 2^(nd) time by Thailand Productivity Institute and was also rated
among top 200 small companies in the world by International magazine
“Forbes” for the 3^(rd) time.

Awards won by TCB (1984 up to present)

In the year 1993, the company received ISO 9002 certificate. In the year
1997 the company received another prestigeous quality certification ISO
14001. During the year 1999 the company received very prestigeous
quality certification QS 9000 which is required by major US automobile
manufacturers from 1^(st) tier suppliers but the company has gone one
step ahead and achieved the certification as 2^(nd) tier supplier for
automobile industry. Similarly, the company was rated in year 2000 at
level 7, one of the highest in the 10 levels of International Quality
Rating System of Det Norske Veritas of Norway. This provides structured
quality process and a road map for company’s journey towards “Total
Quality Management”.

In 2001, company had achieved the unique distinction of getting world’s
two most prestigious quality awards namely Deming prize which is the
world’s top quality award for Total Quality Management of the
organization from Union of Japanese Scientists and Engineers (JUSE) and
the “ Total Productive Maintenance (TPM)” excellence award for all round
excellence in the operational effectiveness awarded by Japan Institute
of Plant Maintenance (JIPM)

TCB is 5^(th) company in the world and 1^(st) in South East Asia
(outside Japan) to achieve the Deming Prize and one of very few
companies in Asia to get “TPM” excellence award

Moreover, during the year 2001 company had also received Prime
Minister’s Productivity award for outstanding productivity and it was
the only company in this category to receive the award which shows
company’s total commitment for best quality and productivity.

During the year 2002, company has received ISO 9001: 2000, OHSAS
18001:1999 and The World’s Best 200 Small Companies from Forbes
Magazine. The company also won the prestigious Thailand Quality Class
award by Thailand Productivity Institute and presented by Prime Minister
of Thailand.

During the year, the company has won many prestigious international and
national awards for its excellent performance like Best Employer in
Thailand, 5^(th) Best Employer in Asia, Best performance award in the
industry category by Stock Exchange of Thailand, Outstanding Company for
Labor Relationship and Welfare Management by Labor Ministry, etc and
these awards are testimony to company’s excellent management systems
which helped the company to achieve competitive edge to market its
products efficiently and to serve its customer better.

Recently the company has also won the prestigious Thailand Quality Class
award 2^(nd) time by Thailand Productivity Institute and was also rated
among top 200 small companies in the world by International magazine
“Forbes” for the 3^(rd) time.

The summary of major award won by the company is presented below

+-----+----------------------------------------------------------------+
| 1   | “ BEST WELFARE MANAGEMENT COMPANY IN THAILAND”                 |
| 984 |                                                                |
|     | by Prime Minister of Thailand                                  |
+-----+----------------------------------------------------------------+
| 1   | “ BEST PETROCHEMICAL INDUSTRY IN THAILAND”                     |
| 988 |                                                                |
|     | by Industrial Minister of Thailand                             |
+-----+----------------------------------------------------------------+
| 1   | “ ASIA PACIFIC AWARD FOR PRODUCITIVITY”                        |
| 989 |                                                                |
|     | by Industrial Minister of Thailand                             |
+-----+----------------------------------------------------------------+
| 1   | “ BEST QUALITY AWARD”                                          |
| 994 |                                                                |
|     | by Commerce Minister of Thailand                               |
+-----+----------------------------------------------------------------+
| 1   | “BEST PRODUCTIVITY COMPANY IN THAILAND”                        |
| 994 |                                                                |
|     | by Prime Minister of Thailand (Mr. Chuan Leekpai)              |
+-----+----------------------------------------------------------------+
| 1   | “BEST WELFARE MANANGEMENT COMPANY IN THAILAND”                 |
| 996 |                                                                |
|     | by Labor & Social Welfare Minister of Thailand                 |
+-----+----------------------------------------------------------------+
| 1   | “ ISO 14001: 1996” Certificate                                 |
| 997 |                                                                |
|     | by BVQI (UK)                                                   |
+-----+----------------------------------------------------------------+
| 2   | “THE WORLD’S BEST 300 SMALL COMPANIES”                         |
| 000 |                                                                |
|     | by Forbes Magazine                                             |
+-----+----------------------------------------------------------------+
| 2   | “IQRS Level-7” Certificate                                     |
| 001 |                                                                |
|     | by DNV (Norway)                                                |
+-----+----------------------------------------------------------------+
| 2   | “BEST PRODUCTIVITY COMPAN IN THAILAND”                         |
| 001 |                                                                |
|     | by Prime Minister of Thailand (Dr. Thaksin Shinawatra)         |
+-----+----------------------------------------------------------------+
| 2   | “TPM EXCELLENCE AWARD – FIRST CATEGORY”                        |
| 001 |                                                                |
|     | by Japan Institute of Plant Maintenance (JIPM)                 |
+-----+----------------------------------------------------------------+
| 2   | “DEMING PRIZE – 2001” The World’s Most Prestigious Award on    |
| 001 | TQM                                                            |
|     |                                                                |
|     | by The Union of Japanese Scientists and Engineers (JUSE)       |
+-----+----------------------------------------------------------------+
| 2   | “GOALDEN PEACOCK GLOBAL QUALITY AWARD”                         |
| 001 |                                                                |
|     | by Institute of Directors, India                               |
+-----+----------------------------------------------------------------+
| 2   | “ISO 9001 : 2000” Certificate (Jan’02)                         |
| 002 |                                                                |
|     | by BVQI (Thailand)                                             |
+-----+----------------------------------------------------------------+
| 2   | “OHSAS 18001 : 1999” Certificate (Mar’02)                      |
| 002 |                                                                |
|     | by BVQI (Thailand)                                             |
+-----+----------------------------------------------------------------+
| 2   | “THE WORLD’S BEST 200 SMALL COMPANIES”                         |
| 002 |                                                                |
|     | by Forbes Magazine                                             |
+-----+----------------------------------------------------------------+
| 2   | " SAFETY, OCCUPATIONAL HEALTH & ENVIRONMENT AWARD- 2003"       |
| 003 |                                                                |
|     | by Prime Minister of Thailand                                  |
+-----+----------------------------------------------------------------+
| 2   | " OUTSTANDING COMPANY – LABOR RELATIONSHIP "                   |
| 003 |                                                                |
|     | by Labor Minister                                              |
+-----+----------------------------------------------------------------+
| 2   | " OUTSTANDING COMPANY- WELFARE MANAGEMENT"                     |
| 003 |                                                                |
|     | by Labor Minister                                              |
+-----+----------------------------------------------------------------+
| 2   | "THE WORLD'S BEST 200 SMALL COMPANIES"                         |
| 003 |                                                                |
|     | by Forbes Magazine                                             |
+-----+----------------------------------------------------------------+
| 2   | " TPM CONSISTENCY AWARD                                        |
| 003 |                                                                |
|     | by Japan Institute of Plant Maintenance (JIPM)                 |
+-----+----------------------------------------------------------------+
| 2   | Best Performance in the Industry Category                      |
| 003 |                                                                |
|     | By Stock Exchange of Thailand                                  |
+-----+----------------------------------------------------------------+
| 2   | THAI LAND QUALITY CLASS AWARD, 2003                            |
| 003 |                                                                |
|     | By Prime Minister of Thailand                                  |
+-----+----------------------------------------------------------------+

4.2 Business Operation of the Company, Subsidiary and Associated
Companies

Thai Carbon Black Public Company Limited has two subsidiaries, namely
Thai Sulphites and Chemicals Co., Ltd in which it hold 60% of the shares
of this company and Lioaning Birla Carbon Co.,Ltd, China in which
company holds 71% of the shares of this company. Thai Sulphites and
Chemicals Co., Ltd. manufactures Sodium Sulphite and Sodium
Metabisulphite and Lioaning Birla Carbon Co.,Ltd manufactures carbon
black. The business of our company and those of subsidiary companies is
independent of each other.

Further, the company has investment in other two companies as its
associated companies, namely Thai Organic Chemicals Co., Ltd., a
manufacturer of Epichlorohydrine and Caustic Soda and P.T. Indo Liberty
Textiles, a manufacturer of Synthetic Yarn.

The sales revenue structure of the company, subsidiary an associated
companies for the past three years is as follow :

Million Baht

+-----------------+----------------+----------+-------+-------+-------+
| Products        | Operated By    | % of     | 2003  | 2002  | 2001  |
|                 |                |          |       |       |       |
|                 |                | Share    | A     | A     | A     |
|                 |                | holdings | mount | mount | mount |
+-----------------+----------------+----------+-------+-------+-------+
| Carbon Black    | Thai Carbon    | 100      | 3,219 | 3,167 | 3,099 |
|                 | Black Plc.     |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| Sodium          | Thai Sulphite  | 60       | 455   | 406   | 408   |
| Sulphites and   | & Chemicals    |          |       |       |       |
| Sodium Meta     | Co.,Ltd.       |          |       |       |       |
| Bisulphites     |                |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| Liaoning Birla  | Carbon Black   | 71       | **    | -     | -     |
| Carbon Co.,Ltd. |                |          | 9.536 |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| Synthetic Yarn  | P.T. Indo      | 40       | *20   | *20   | *22   |
|                 | Liberty        |          | 8,262 | 3,413 | 9,501 |
|                 | Textiles       |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| E               | Thai Organic   | 49       | 1,131 | 956   | 1,029 |
| pichlorohydrine | Chemicals      |          |       |       |       |
| & Caustic Soda  | Co.,Ltd        |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+

* Million Indonesia Rupiah

** Million Chinese RMB (The company started operation from 1.07.2003)