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 for
Carbon Black. In addition, the company also export 57% of Carbon Black
production to several countries.

Our company does not have any holding company.

Recently the company has won the prestigious Thailand Quality Class
award by Thailand Quality institute and was also rated among top 200
small companies in the world by International magazine “Forbes”

The company has also recently received the ISO/IEC 17025 certification
from TISI, Thailand for its laboratory testing facilities.

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.

The summary of award won by the company since 1984 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                                             |
+-----+----------------------------------------------------------------+

4.2 Business Operation of the Company, Subsidiary and Associated
Companies

Thai Carbon Black Public Company Limited has one subsidiary, namely Thai
Sulphites and Chemicals Co., Ltd. It hold 60% of the shares of this
company. Thai Sulphites and Chemicals Co., Ltd. manufactures Sodium
Sulphite and Sodium Metabisulphite. The business of our company does not
have any direct or indirect relation with the business of our subsidiary
company.

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 revenue structure of the group in the past three years is as follow
:

Million Baht

+-----------------+----------------+----------+-------+-------+-------+
| Products        | Operated By    | % of     | 2002  | 2001  | 2000  |
|                 |                |          |       |       |       |
|                 |                | Share    | A     | A     | A     |
|                 |                | holdings | mount | mount | mount |
+-----------------+----------------+----------+-------+-------+-------+
| Carbon Black    | Thai Carbon    | 100      | 3167  | 3,099 | 2,655 |
|                 | Black Plc.     |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| Sodium          | Thai Sulphite  | 60       | 406   | 408   | 360   |
| Sulphites and   | & Chemicals    |          |       |       |       |
| Sodium Meta     | Co.,Ltd.       |          |       |       |       |
| Bisulphites     |                |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| Synthetic Yarn  | P.T. Indo      | 40       | *20   | *22   | *20   |
|                 | Liberty        |          | 3,413 | 9,500 | 6,061 |
|                 | Textiles       |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+
| E               | Thai Organic   | 49       | 956   | 1,029 | 767   |
| pichlorohydrine | Chemicals      |          |       |       |       |
| & Caustic Soda  | Co.,Ltd        |          |       |       |       |
+-----------------+----------------+----------+-------+-------+-------+

* Million Indonesia Rupiah