13.1 Financial Statement

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13.2 Management Discussions & Analysis (Company only)

Production

During the year 2010, the company witnessed growth in production to the
tune of 51% due to commissioning of line 6 in June 2010. Our Production
during 2010 was at a level of 242,256 Mt compared to 160,911 Mt last
year.

Sales Revenue 

The sales revenue increased by 64% from Baht 5,483 million to Baht 9,004
million. The sales volume recorded highest ever sales of 248,578 MT
reflecting a growth of 43% over the previous year.

The ratio of export to local sales for the year 2010 has changed from
41: 59 to 44: 56. It is Company’s strategy to strive the optimum product
and customer mix to enhance the contribution margin and sales volume.

Other Income

Other income in 2010 of Baht 114 million is higher against Baht 22
million last year.

The interest income of Baht 17 million is higher against Baht 9 million
last year mainly due to little increase in interest rate and better cash
management.

Dividend income of Baht 64 million is higher against Baht 2 million last
year.

There is a gain on exchange of Baht 21 million against loss of Baht 4
million last year mainly due to better forex management.

Cost and Expenses

The cost of sales increased by 75% from Baht 4,194 million to Baht 7,340
million due to increase in volume of sales by 43%.

Profits

During the year 2010, the company recorded the net profit of 1,029 Mn
Baht despite taking impairment loss of 151 Mn Baht on the investment in
its subsidiary. The profit from company’s Carbon Black business improved
to Baht 1,029 million compared to Baht 878 million in 2009 due to strong
focus in all areas of operation where as net profit on consolidated
basis also improved to Baht 1,273 million compared to Baht 1,074 million
in 2009.

Financial Position (Company only)

Assets

The total assets as at 31^(st) Dec 2010 amounted to Baht 9,614 million
compared to Baht 7,745 million for the previous year, an increase by
24%. Details of major assets are as follow

-   Cash

  The cash and cash equivalents and funds placed with financial
  institutions were higher at Baht 1,657 million compared to Baht 997
  million for 2009 mainly due to higher cash profit and better
  performance.

-   Inventory

  At the year end the inventory was higher due to liability taken for
  Inventory in transit for Raw Material at Baht 2,009 million compared
  to Baht 1,069 million for the previous year. The shipment was received
  in 1^(st) week of Jan’11.

-   Property, plant and equipment

  Property, Plant and Equipment increased by 3.71% to Baht 2,402 million
  against Baht 2,316 million last year.

Liabilities and Shareholders Equity

The total liabilities for the year ended amounted to Baht 1,638 million,
increased by 165% from last year mainly due to provision of liability
for the shipment arriving in the first week on Jan’11.

The payable for purchase of machinery and equipment has reduced from
Baht 96 million to Baht 78.

Earning per share

The earning per share was Baht 3.43 in 2010 compared to Baht 2.93 in
2009 due to higher profit for 2010.

Book value per share

The book value per share increased to Baht 35.50 against Baht 23.76 in
2009 due to higher profit during the year.

Analysis of Financial Ratios (Company only)

Liquidity

The company’s current ratio is at 3.51 against 6.69 in year 2009 mainly
due to liability taken for the shipment to be arrived in the first week
of Jan’11.

Equity

The company has historically maintained very low debt to equity ratio.
At the year end, company did not have any long term and short term
borrowings except very minor overdrawn balance. The debt to equity ratio
is only 0.21:1.

Profitability

The gross profit margin of the company is 18.48% as compared to 23.52%
in 2009.The net profit margin is 11.28% compared to 15.95% in 2009.

The return on average shareholders equity based on total profit after
tax is 13.62% compared to 13% last year due to higher net profit in 2010

Efficiency

The return on fixed assets has increased by to 52% from 48% and Return
on total assets is 11.85%. The inventory turnover ratio is at 4.63
against 4.42 in 2009.

13.3 Remuneration to Auditors

1.  Audit fee

  Company, its subsidiary and associated companies have paid audit fee
  for year 2010 as per details given below

+----------------------+----------------------------+-----------------+
| Company name         | Audit firm                 | Audit fee       |
+----------------------+----------------------------+-----------------+
| Thai Carbon Black    | Ernst & Young Office       | Baht 900,000-   |
| Pcl                  | Limited, Bangkok, Thailand |                 |
+----------------------+----------------------------+-----------------+
| Liaoning Birla       | A Liaoning Zhongheng       | RMB 55,000-     |
| Carbon Co.,ltd       | Certified Public           |                 |
|                      | Accountants Co.,Ltd.,      | (Baht 271,150-  |
|                      | China                      | )               |
+----------------------+----------------------------+-----------------+
| Birla Carbon Mexico, | No auditor appointed (as   | No audit fees   |
| S.A.DE               | company is in initial      |                 |
|                      | stage of activities)       |                 |
| C.V.                 |                            |                 |
+----------------------+----------------------------+-----------------+
| Aditya Birla         | Ernst & Young Office       | Baht 1,800,000- |
| Chemicals (Thailand) | Limited                    |                 |
| Co.,Ltd              |                            |                 |
|                      | Bangkok, Thailand          |                 |
+----------------------+----------------------------+-----------------+
| P.T. Indo Liberty    | Deloitte, Indonesia        | USD.25,000      |
| Textiles             |                            |                 |
|                      |                            | (Approx. Baht   |
|                      |                            | 837,750- )      |
+----------------------+----------------------------+-----------------+
| Ameri Blend Inc,     | No auditor appointed (as   | No audit fees   |
| USA.                 | company is in initial      |                 |
|                      | stage of activities)       |                 |
+----------------------+----------------------------+-----------------+

Other fee

+-------------------------------+--------------------------------------+
| Thai Carbon Black Pcl         | -BOI Audit fee of Baht 120,000-      |
|                               |                                      |
| Aditya Birla Chemicals        | -BOI Audit fee of Baht 480,000-      |
| (Thailand) Co.,Ltd            |                                      |
+-------------------------------+--------------------------------------+