<SEC-DOCUMENT>0000891092-12-002872.txt : 20120516
<SEC-HEADER>0000891092-12-002872.hdr.sgml : 20120516
<ACCEPTANCE-DATETIME>20120515184927
ACCESSION NUMBER:		0000891092-12-002872
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20111231
FILED AS OF DATE:		20120516
DATE AS OF CHANGE:		20120515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GROUP SIMEC SA DE CV
		CENTRAL INDEX KEY:			0000887153
		STANDARD INDUSTRIAL CLASSIFICATION:	STEEL WORKS, BLAST FURNACES  ROLLING MILLS (COKE OVENS) [3312]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		20-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11176
		FILM NUMBER:		12846838

	BUSINESS ADDRESS:	
		STREET 1:		CALZADA LAZARO CARDENAS 601
		CITY:			44910 GUADALAJARA JA
		STATE:			O5
		ZIP:			10022

	MAIL ADDRESS:	
		STREET 1:		CALZADA LAZARO CARDENAS
		CITY:			GUADALAJARA JALISCO
		STATE:			O5
		ZIP:			999999999
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F
<SEQUENCE>1
<FILENAME>e48470_20f.htm
<DESCRIPTION>ANNUAL REPORT
<TEXT>
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: center">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">____________________</P>

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">FORM 20-F</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">____________________</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.3in; text-indent: -0.3in">[_]&#9;REGISTRATION STATEMENT
PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">OR</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.3in; text-indent: -0.3in">[X]&#9;ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">For the fiscal year ended December
31, 2011</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">OR</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.3in; text-indent: -0.3in">[_]&#9;TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">OR</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.3in; text-indent: -0.3in">[_]&#9;SHELL COMPANY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Commission File Number 1-11176</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">_____________________________________</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">GRUPO SIMEC, S.A.B. de C.V.</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Exact name of registrant as specified in its
charter)</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">_____________________________________</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">GROUP SIMEC</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Translation of registrant&rsquo;s name into
English)</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">_____________________________________</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">UNITED MEXICAN STATES</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Jurisdiction of incorporation or organization)</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">_____________________________________</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Calzada L&aacute;zaro C&aacute;rdenas 601<BR>
Colonia La Nogalera, Guadalajara,<BR>
Jalisco, M&eacute;xico 44440</B></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Address of principal executive offices)</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center"><BR>
<B>Adolfo Luna Luna, telephone number 011-52-33 3770-6700, e-mail aluna@gruposimec.com.mx </B></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Name, telephone, e-mail and/or facsimile number
and address of company contact person)</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">_____________________________________</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Securities registered or to be registered
pursuant to Section 12(b) of the Act: </B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Title of
        Each Class</B></P></TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Name of
        Each Exchange on Which Registered</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">American Depositary Shares (each representing
        one Series B share)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Series B Common Stock</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">NYSE Amex LLC</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">NYSE Amex LLC*</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">*</TD><TD>Not for trading, but only in connection with the registration of American depositary shares.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Securities registered or to be registered
pursuant to Section 12(g) of the Act: None</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Securities for which there is a
reporting obligation pursuant to Section 15(d) of the Act: None</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B>Indicate the number of outstanding
shares of each of the issuer&rsquo;s classes of common stock as of December 31, 2011 was:</B></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">Series B Common Stock &mdash; 497,709,214 shares</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">_____________________________________</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes&nbsp;[_]&nbsp;&nbsp;&nbsp; No&nbsp;[X]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">If this report is an annual or transition report, indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes&nbsp;[_]&nbsp;&nbsp;&nbsp; No&nbsp;[X]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes&nbsp;[X] No&nbsp;[_]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes&nbsp;[_] No&nbsp;[_] (note: not required of registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &ldquo;accelerated filer and large accelerated
filer&rdquo; in Rule 12b-2 of the Exchange Act. (Check one):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Large accelerated filer&nbsp;[_] Accelerated filer&nbsp;[X]
Non-accelerated filer&nbsp;[_]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">[_]&nbsp;U.S. GAAP [_]&nbsp;International Financial Reporting
Standards as issued by the International Accounting Standards Board&nbsp;[X]&nbsp;Other</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark which financial statement item the
registrant has elected to follow. Item 17&nbsp;[_] Item 18&nbsp;[X]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes&nbsp;[_] No&nbsp;[X]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center">Table
of Contents</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: right"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 16%; padding-bottom: 6pt">&nbsp;</TD>
    <TD STYLE="width: 76%; padding-bottom: 6pt"><B>&nbsp;</B></TD>
    <TD STYLE="width: 8%; padding-bottom: 6pt; text-align: right"><B>Page</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><B><A HREF="#a_001">PART I</A></B></TD>
    <TD STYLE="padding-bottom: 6pt"></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 1.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_002">Identity of Directors, Senior Management and Advisers</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 2.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_003">Offer Statistics and Expected Timetable</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 3.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_004">Key Information</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 4.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_005">Information on the Company</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">19</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 4A.&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_006">Unresolved Staff Comments</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">45</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 5.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_007">Operating and Financial Review and Prospects</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">45</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 6.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_008">Directors, Senior Management and Employees</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">63</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 7.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_009">Major Shareholders and Related Party Transactions</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">70</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 8.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_010">Financial Information</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">71</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 9.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_011">The Offer and Listing</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">73</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 10.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_012">Additional Information</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">75</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 11.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_013">Quantitative and Qualitative Disclosures About Market Risk</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">88</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 12.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_014">Description of Securities Other than Equity Securities</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">89</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><B>PART II</B></TD>
    <TD STYLE="padding-bottom: 6pt"></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">90</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 13.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_016">Defaults, Dividends Arrearages and Delinquencies</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">90</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 14.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_017">Material Modifications to the Rights of Security Holders and Use of Proceeds</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">90</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 15.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_018">Controls and Procedures</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">91</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_019">Reserved</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">100</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16A.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_020">Audit Committee Financial Expert</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">100</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16B.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_021">Code of Ethics</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">100</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16C.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_022">Principal Accountant Fees and Services</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">101</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16D.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_023">Exemptions from the Listing Standards for Audit Committees</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">101</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16E.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_024">Purchases of Equity Securities by the Issuer and Affiliated Purchasers</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">101</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16F.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_025">Change in Registrant&rsquo;s Certifying Accountant</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">101</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 16G.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_026">Corporate Governance</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">101</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><B><A HREF="#a_027">PART III</A></B></TD>
    <TD STYLE="padding-bottom: 6pt"></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">103</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 17.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_028">Financial Statements</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">103</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 18.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_029">Financial Statements</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">103</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 19.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_030">Exhibits</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">103</TD></TR>
</TABLE>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">CERTAIN TERMS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Grupo Simec, S.A.B. de C.V. is a corporation
(<I>sociedad an&oacute;nima burs&aacute;til de capital variable</I>) organized under the laws of Mexico. Unless the context requires
otherwise, when used in this annual report, the terms &ldquo;we,&rdquo; &ldquo;our,&rdquo; &ldquo;the company,&rdquo; &ldquo;our
company&rdquo; and &ldquo;us&rdquo; refer to Grupo Simec, S.A.B. de C.V., together with its consolidated subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">References in this annual report to &ldquo;U.S.
dollars&rdquo; or &ldquo;U.S.$&rdquo; are to the lawful currency of the United States. References in this annual report to &ldquo;pesos&rdquo;
or &ldquo;Ps.&rdquo; are to the lawful currency of Mexico. References to &ldquo;tons&rdquo; in this annual report refer to tons;
a metric ton equals 1,000 kilograms or 2,204 pounds. We publish our financial statements in pesos.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The terms &ldquo;special bar quality
steel&rdquo; or &ldquo;SBQ steel&rdquo; refer to steel that is hot rolled or cold finished round square and hexagonal steel bars
that generally contain higher proportions of alloys than lower quality grades of steel. SBQ steel is produced with precise chemical
specifications and generally is made to order following client specifications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">This annual report contains translations
of certain peso amounts to U.S. dollars at specified rates solely for your convenience. These translations do not mean that the
peso amounts actually represent such dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise
indicated, we have translated these U.S. dollar amounts from pesos at the exchange rate of Ps. 13.9904 per U.S.$1.00, the interbank
transactions rate in effect on December 31, 2011. On April 30, 2012, the interbank transactions rate for the peso was Ps.12.99
per U.S.$1.00.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">FORWARD LOOKING STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">This annual report contains certain statements
regarding our business that may constitute &ldquo;forward looking statements&rdquo; within the meaning of the safe harbor provisions
of the U.S. Private Securities Litigation Reform Act of 1995. When used in this annual report, the words &ldquo;anticipates,&rdquo;
&ldquo;plans,&rdquo; &ldquo;believes,&rdquo; &ldquo;estimates,&rdquo; &ldquo;intends,&rdquo; &ldquo;expects,&rdquo; &ldquo;projects&rdquo;
and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain
those words. These statements, including, but not limited to, our statements regarding our strategy for raw material acquisition,
products and markets, production processes and facilities, sales and distribution and exports, growth and other trends in the steel
industry and various markets, operations and liquidity and capital resources, are based on management&rsquo;s beliefs, as well
as on assumptions made by, and information currently available to, management, and involve various risks and uncertainties, some
of which are beyond our control. Our actual results could differ materially from those expressed in any forward looking statement.
In light of these risks and uncertainties, we cannot assure you that forward looking statements will prove to be accurate. Factors
that might cause actual results to differ materially from forward looking statements include, but are not limited to, the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>factors relating to the steel industry (including the cyclicality of the industry, finished product prices, worldwide production
capacity, the high degree of competition from Mexican, U.S. and foreign producers and the price of ferrous scrap, iron ore and
other raw materials);</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our inability to operate at high capacity levels;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the costs of compliance with Mexican and U.S. environmental laws;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>future capital expenditures and acquisitions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>future devaluations of the peso;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the imposition by Mexico of foreign exchange controls and price controls;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the influence of economic and market conditions in other countries on Mexican securities; and</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the factors discussed in Item 3.D &ndash; &ldquo;Risk Factors&rdquo; below.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Forward looking statements speak only
as of the date they were made, and we undertake no obligation to update publicly or to revise any forward looking statements after
the date of this annual report because of new information, future events or other factors. In light of the risks and uncertainties
described above, the forward looking events and circumstances discussed in this annual report might not occur.</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center; text-indent: 0in"><A NAME="a_001"></A><FONT STYLE="font-family: Times New Roman Bold,serif; color: #010000">PART
I</FONT>&nbsp;</P>

<P STYLE="margin: 0 0 9"><A NAME="a_002"></A><FONT STYLE="color: #010000"><B>Item</B></FONT><B> <FONT STYLE="color: #010000">1.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Identity of Directors, Senior Management and Advisers</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6 0 12pt; text-indent: 0.5in">Not applicable.</P>

<P STYLE="margin: 0"><A NAME="a_003"></A><FONT STYLE="color: #010000"><B>Item</B></FONT><B> <FONT STYLE="color: #010000">2.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Offer Statistics and Expected Timetable</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6 0 12pt; text-indent: 0.5in">Not applicable.</P>

<P STYLE="margin: 0 0 9"><A NAME="a_004"></A><FONT STYLE="color: #010000"><B>Item</B></FONT><B> <FONT STYLE="color: #010000">3.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Key Information</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0; padding-top: 6"></TD><TD STYLE="width: 0.25in; padding-top: 6"><FONT STYLE="color: #010000">A.</FONT></TD><TD STYLE="padding-top: 6">Selected Financial Data</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6 0 12pt; text-indent: 0.5in">This annual report includes our consolidated
financial statements as of December 31, 2011 and 2010 and for each of the three years ended December 31, 2011, 2010 and 2009. We
have prepared our financial statements in conformity with Mexican Financial Reporting Standards (&ldquo;MFRS&rdquo;) issued by
the Mexican Financial Reporting Standards Research and Development Board (<I>Consejo Mexicano de Normas de Informaci&oacute;n Financiera,
A.C.) </I>(&ldquo;CINIF&rdquo;), which include bulletins and circulars issued by the Accounting Principles Commission (&ldquo;CPC&rdquo;)
of the Mexican Institute of Public Accountants (&ldquo;IMCP&rdquo;) to the extent not amended, replaced or abrogated by MFRS. We
have adjusted the financial statements of our non-Mexican subsidiaries to conform to MFRS, and we have translated them to Mexican
pesos. See Note 4(b) to our consolidated financial statements included elsewhere herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">MFRS differ in certain significant respects
from generally accepted accounting principles in the United States (&ldquo;U.S. GAAP&rdquo;). Note 25 to our consolidated financial
statements included elsewhere herein provides a description of the principal differences between MFRS and U.S. GAAP, as they relate
to us, a reconciliation to U.S. GAAP of net income, total stockholders&rsquo; equity and a statement of cash flows under U.S. GAAP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to MFRS, in our consolidated
financial statements and the selected financial information set forth below:</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Beginning January 1, 2008, MFRS B-10, &quot;Effects of Inflation&quot;, has been in effect, which requires the recognition
of the effects of inflation through the application of the comprehensive method only in inflationary environments (i.e., inflation
equal or higher than 26%, accumulated during the previous three annual periods). Since the accumulated inflation in Mexico during
the three years prior to our financial statements included herein was lower than 26%, the economic environment has been qualified
as non-inflationary. Therefore, our financial statements for 2009, 2010 and 2011 included herein are presented in nominal pesos,
except for the non-monetary items acquired before 2008, which include their restatement to constant pesos as of December 31, 2007.<BR>
Accumulated inflation in Mexico during the last three years prior to 2009, 2010 and 2011 amounted to 15.0%, 14.5% and 15.2%, respectively.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>MFRS C-8 was issued by the CINIF to replace Mexican accounting Bulletin C-8, &ldquo;Intangible Assets&rdquo;. The rule defines
intangible assets as non-monetary items and broadens the criteria of identification, indicating that an intangible asset must be
separable; this means that such asset could be sold, transferred, or used by the entity. In addition, intangible assets arise from
legal or contractual rights, whether those rights are transferable or separable from the entity. On the other hand, this standard
establishes that preoperative costs should be eliminated from the capitalized balance, affecting retained earnings, and without
restating prior financial statements. This amount should be presented as an accounting change in consolidated financial statements.
The effect of the adoption of this MFRS was to cancel unamortizated preoperative expenses to retained earnings for Ps.152 million
less its deferred income tax liability of Ps. 42 million in 2009.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Certain of the financial information
set forth below is presented in accordance with U.S. GAAP. The effect of inflation accounting under MFRS until December 31, 2007
has not been reversed in the reconciliation to U.S.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">GAAP of
net income and total stockholders&rsquo; equity, except with respect to certain information included in the cash flow statement.
See Note 25 to our consolidated financial statements included elsewhere herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following tables present the selected
consolidated financial information for our company as of and for the years ended December 31, 2007, 2008, 2009, 2010 and 2011.
The selected financial and operating information as of and for the years ended December 31, 2007, 2008 and 2009 set forth below
has been derived in part from our consolidated financial statements, which have been reported on by Mancera S.C., a member practice
of Ernst &amp; Young Global (&ldquo;Ernst &amp; Young&rdquo;), an independent registered public accounting firm, and the selected
financial and operating information as of and for the years ended December 31, 2010 and 2011 set forth below has been derived in
part from our consolidated financial statements, which have been reported on by Castillo Miranda y Compa&ntilde;&iacute;a, S.C.,
a member practice of BDO International Limited (&ldquo;BDO&rdquo;), an independent registered public accounting firm. Ernst &amp;
Young and BDO have relied on the audited combined financial statements of Corporaci&oacute;n Aceros DM., S.A. de C.V. (&ldquo;Aceros
DM&rdquo;) subsidiaries and affiliates, reported on by Marcelo de los Santos y C&iacute;a., S. C. a member of Moore Stephens International
(&ldquo;Moore Stephens&rdquo;). The selected financial information as of and for the years ended December 31, 2007 and 2008 set
forth below has been derived in part from our consolidated financial statements that are not included herein. The selected financial
information should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated financial statements
included elsewhere herein.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 7pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of and for Year Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2007</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2008</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011(1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD COLSPAN="18" STYLE="text-align: center; vertical-align: bottom">(Millions of pesos, except per share and ADS data and operational data) </TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom">(Millions of U.S. dollars)&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income Statement</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-indent: -0.1in; padding-left: 0.1in">Data:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic"><B><I>MFRS</I></B><I>:</I></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">24,106</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">35,185</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">19,232</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">24,576</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">29,270</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">2,092</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Cost of sales(2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">21,125</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">30,744</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,980</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">22,250</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,624</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,831</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,981</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,441</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,326</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,646</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">261</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">698</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">907</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">597</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">22</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">378</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">507</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">553</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">455</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">33</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,261</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,156</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(852</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,174</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,592</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Financial (expense) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(175</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(96</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(207</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">584</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other (expense) income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;(4</TD><TD STYLE="text-align: left">)&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(186</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(114</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;(8</TD><TD STYLE="text-align: left">)&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Impairment of Intangible assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,368</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before taxes, and non-controlling&nbsp; interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,977</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,286</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">781</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,062</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">219</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Income tax expense (benefit)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">644</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,048</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,065</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">112</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">110</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,679</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,221</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">669</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,952</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Non-controlling&nbsp; interest income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">118</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(877</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(268</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Controlling interest income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,557</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,811</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(344</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">937</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,862</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">205</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Net income (loss) per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.33</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.73</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.69</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.88</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.75</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.41</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss) per ADS(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.99</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.07</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.23</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Weighted average shares outstanding (thousands)(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">468,228</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">484,904</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">497,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">497,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">497,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">497,709</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Weighted average ADSs outstanding (thousands)(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,743</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,635</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,903</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,903</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,903</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,903</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-align: left; text-indent: -0.1in; padding-left: 0.1in">U.S. GAAP including effects of inflation until 2007:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,106</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,185</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,232</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,576</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,270</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,092</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Cost of sales(2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,744</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,624</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,831</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,981</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,441</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,326</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,646</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">261</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating income (loss)(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,310</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,166</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,115</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">950</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,584</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Financial (expense) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(175</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(96</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(207</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">584</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(69</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;(2</TD><TD STYLE="text-align: left">)&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before taxes, and non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,363</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,181</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">674</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,135</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">224</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income tax expense (benefit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">653</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,057</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,025</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,954</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,156</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">562</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,027</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">216</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Non-controlling&nbsp; interest income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(877</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(268</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">129</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">U.S. GAAP adjustment on non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,844</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(279</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">830</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,898</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">207</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Net income (loss) per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.39</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.56</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.67</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.82</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.42</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss) per ADS(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.41</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.68</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.47</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Balance Sheet Data:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-indent: -0.1in; padding-left: 0.1in">MFRS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,906</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,349</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,269</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,235</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total short-term liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,860</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,256</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,952</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,899</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,822</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">273</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Total long-term liabilities(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,780</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,314</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,875</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,832</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,178</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">227</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total stockholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,371</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,448</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,079</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,618</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,269</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,735</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-align: left; text-indent: -0.1in; padding-left: 0.1in">U.S. GAAP including effects of inflation&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

<!-- Field: Page; Sequence: 7; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; padding-bottom: 12pt; border-bottom: Black 4px solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 7pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of and for Year Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2007</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2008</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011(1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD COLSPAN="18" STYLE="text-align: center; vertical-align: bottom">(Millions of pesos, except per share and ADS data and operational data) </TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom">(Millions of U.S. dollars)&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-align: left; text-indent: -0.1in; padding-left: 0.1in; width: 40%"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;until 2007:</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,908</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,978</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,353</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,398</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,244</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total short-term liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,268</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,499</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,434</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,433</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">317</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Total long-term liabilities(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,280</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,292</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,299</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,619</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,440</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,178</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,222</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,844</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,216</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">158</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total stockholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,813</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,182</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,965</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,776</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,582</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flow Data:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-indent: -0.1in; padding-left: 0.1in">MFRS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash provided by operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,352</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,845</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,344</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,954</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash provided by (used in) financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,324</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">469</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(126</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash (used in) provided by investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(484</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(256</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(693</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(466</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other Data:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-indent: -0.1in; padding-left: 0.1in">MFRS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Capital expenditures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">486</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">480</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">263</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">496</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">432</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Adjusted EBITDA(7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,810</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,051</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,593</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">257</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Working capital(8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,764</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,994</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,548</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,290</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,378</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">885</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and Amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">549</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">895</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,048</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,098</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,001</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Dividends declared</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operational Data:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.75pt">(capacity and production in thousands of tons):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Annual installed capacity(9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,902</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,758</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total tons shipped</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,691</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,924</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,040</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,241</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,289</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Mexico</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,028</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,285</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,225</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,275</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">United States, Canada and elsewhere outside Mexico</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,791</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,896</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">755</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">SBQ steel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,951</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,952</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">826</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,109</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,178</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Structural and other steel products</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">740</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">972</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,214</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,111</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-indent: -0.1in; padding-left: 0.1in">Per ton data</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-indent: -0.1in; padding-left: 0.1in">MFRS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,958</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,033</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,427</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,967</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,787</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Cost of sales per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,850</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,514</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,303</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,194</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating (loss) income per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">840</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,079</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(418</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">524</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Adjusted EBITDA(7) per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,044</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,385</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Number of employees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,823</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,378</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,361</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,686</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Peso amounts have been translated into U.S. dollars solely for the convenience of the reader, at the exchange rate of Ps. 13.9904
per U.S.$1.00, the interbank transactions rate in effect on December 31, 2011.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>From January 1, 2011 the amendment to MFRS C-4 (&ldquo;inventories&rdquo;) no longer permits the use of direct cost to determine
the value of inventories. Instead, the indirect cost of production must be included in the determination of the production cost
(full absorption cost). Accordingly, for comparative purposes, in accordance with the MFRS B-1 &ldquo;Accounting changes and error
corrections&rdquo;, we made retroactive adjustments to our financial statements for the years ended December 31, 2010, 2009, 2008
and 2007. The cumulative effect derived from this change amounted to Ps. 160,675, Ps 96,658, Ps. 142,740 and Ps. 113,716 as of
December 31, 2010, 2009, 2008 and 2007, respectively, net of the deferred income tax. The effect to the controlling interest amounted
to Ps. 101,030, Ps. 68,072, Ps.&nbsp;88,879, and Ps. 64,731, for December 31, 2010, 2009, 2008 and 2007, respectively.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Our series B shares are listed on the Mexican Stock Exchange, and the ADSs are listed on the New York Stock Exchange. On May
30, 2006, we effected a 3 for 1 stock split. Following our stock split, one American depositary share, or &ldquo;ADS,&rdquo; represents
three series B shares. Previously one ADS represented one series B share.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>For U.S. GAAP and MFRS purposes, the weighted average shares outstanding were calculated to give effect to the stock split
mentioned in note (3) above.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(5)</TD><TD>In 2010 we recorded expenses for employee profit sharing at Ps. 0.095 million, an impairment loss of intangible assets of Ps.
102 million and a cancellation of other assets of Ps. 117 million. In 2009 we recorded an impairment loss of intangible assets
of Ps. 2,266 million and other expense of Ps. 7 million for employee profit sharing, which were reclassified to operating expenses
for U.S. GAAP purposes. In 2008 we recorded other expense of Ps. 24 million for employee profit sharing, which were reclassified
to operating expenses for U.S. GAAP purposes. In 2007 we recorded Ps. 17 million of gain on derivative instruments in other income
and an expense of Ps. 8 million for fiscal amnesty offered by the Mexican government in other expense, which were reclassified
to operating expenses for U.S. GAAP purposes. In 2011 we did not record expenses for employee profit sharing or impairment loss
of intangible assets.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(6)</TD><TD>Total long-term liabilities include amounts relating to deferred taxes.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(7)</TD><TD>Adjusted EBITDA is not a financial measure computed under Mexican or U.S. GAAP. Adjusted EBITDA is derived from our MFRS financial
information and means MFRS net income excluding: (i) depreciation, amortization and impairment loss; (ii) financial income</TD></TR></TABLE>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">&nbsp;</TD><TD>(expense),
net (which is composed of net interest expense, foreign exchange gain or loss, and monetary position gain or loss); (iii) other
income (expense); and (iv) income tax expense and employee statutory profit-sharing expense.</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: 0in">Adjusted EBITDA does not represent,
and should not be considered as, an alternative to net income, as an indicator of our operating performance, or as an alternative
to cash flow as an indicator of liquidity. You should bear in mind that Adjusted EBITDA is not defined and is not a recognized
financial measure under MFRS or U.S. GAAP and that it may be calculated differently by different companies and must be read in
conjunction with the explanations that accompany it. Adjusted EBITDA as presented in this table does not take into account our
working capital requirements, debt service requirements and other commitments.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: 0in">We believe that Adjusted EBITDA can
be useful to facilitate comparisons of operating performance between periods and with other companies in our industry because it
excludes the effect of: (i) depreciation, amortization and impairment loss which represents a non-cash charge to earnings; (ii)
certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange
rates and inflation rates, which can have little bearing on our operating performance; (iii) other income (expense) that are non-recurring
operations; and (iv) income tax expense and employee statutory profit-sharing expense. However, Adjusted EBITDA has certain significant
limitations, including that it does not include the following:</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 8pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-size: 8pt">taxes, which are a necessary and recurring part of our operations; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 8pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-size: 8pt">depreciation, amortization and impairment loss which, because we must utilize property, equipment
and other assets in order to generate revenues in our operations, is a necessary and recurring part of our costs; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 8pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-size: 8pt">comprehensive cost of financing, which reflects our cost of capital structure and assisted us
in generating revenues; and </FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 8pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-size: 8pt">other income and expenses that are part of our net income.</FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: 0in">Adjusted EBITDA should not be considered
in isolation or as a substitute for net income, net cash flow from operating activities or net cash flow from investing and financing
activities. Reconciliation of net income to Adjusted EBITDA is as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2007</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2008</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011(1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="19" STYLE="text-align: center; vertical-align: bottom">(Millions of pesos)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom">(Millions of U.S. dollars)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-indent: -0.1in; padding-left: 0.1in">MFRS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">1,679</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">1,929</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">(1,221</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">669</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">2,952</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">211</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">549</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">895</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,048</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,098</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,001</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(186</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(114</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Financial income (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(175</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(96</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(207</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">584</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Impairment of intangibles assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Income tax expense (benefit)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">644</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,048</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,065</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">112</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">110</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Adjusted EBITDA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,810</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,051</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,593</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">257</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 5.5in 1pt 0in"><DIV STYLE="font-size: 1pt; border-top: Black 0.5pt solid; width: 100%; margin-top: 6">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(8)</TD><TD>Working capital is defined as excess of current assets over current liabilities.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(9)</TD><TD>Installed capacity is determined at December 31 of the relevant year.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 12pt 0">Exchange Rates</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth, for the
periods indicated, the high, low, average and period-end free-market exchange rate expressed in pesos per U.S. dollar. The average
annual rates presented in the following table were calculated by using the average of the exchange rates on the last day of each
month during the relevant period. The data provided in this table is based on noon buying rates published by the U.S. Federal Reserve
Board for cable transfers in Mexican pesos. We have not restated the rates in constant currency units. All amounts are stated in
pesos. We make no representation that the Mexican peso amounts referred to in this annual report could have been or could be converted
into U.S. dollars at any particular rate or at all.</P>







<!-- Field: Page; Sequence: 9; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; padding-bottom: 12pt; border-bottom: Black 4px solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Exchange Rates</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; vertical-align: bottom; width: 47%">Year Ended December 31</TD>
    <TD STYLE="width: 10%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>High</B></P></TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 11%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Low</B></P></TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 11%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Average
        (1)</B></P></TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 11%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Period
        End</B></P></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom; width: 47%">2007</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom; width: 10%">11.27</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 3%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom; width: 11%">10.67</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 4%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom; width: 11%">10.93</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; width: 3%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom; width: 11%">10.92</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">2008</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.94</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;&nbsp;9.92</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">11.14</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.83</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">2009</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">15.41</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.63</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.50</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.06</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">2010</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.19</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.16</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.62</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.38</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">2011</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">14.25</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">11.51</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.44</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.95</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; vertical-align: bottom">Year Ended December 31</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>High</B></P></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Low</B></P></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Average
        (1)</B></P></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Period
        End</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; vertical-align: bottom">Month in 2012</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">January</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.75</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.93</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.38</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.04</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">February</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.95</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.63</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.78</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.79</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">March</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.99</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.63</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.75</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.81</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">April (through April 30)</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.23</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.73</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">13.06</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; vertical-align: bottom">12.99</TD></TR>
</TABLE>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Average of month-end or daily rates, as applicable.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in">Except for the period from September through
December 1982, during a liquidity crisis, the Mexican Central Bank has consistently made foreign currency available to Mexican
private-sector entities (such as us) to meet their foreign currency obligations. Nevertheless, in the event of renewed shortages
of foreign currency, we cannot assure you that foreign currency would continue to be available to private-sector companies or that
foreign currency needed by us to service foreign currency obligations or to import goods could be purchased in the open market
without substantial additional cost or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fluctuations in the exchange rate between
the peso and the U.S. dollar will affect the U.S. dollar value of securities traded on the Mexican Stock Exchange, including the
series B shares and, as a result, will likely affect the market price on the New York Stock Exchange of the ADSs that represent
the series B shares. Such fluctuations will also affect the U.S. dollar conversion by the depositary of any cash dividends paid
in pesos on series B shares represented by ADSs.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Capitalization and Indebtedness</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Reasons for the Offer and Use of Proceeds</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>Risk Factors</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Investing in our series B shares and
the ADSs involves a high degree of risk. You should consider carefully the following risks, as well as all the other information
presented in this annual report, before making an investment decision. Any of the following risks, if they were to occur, could
materially and adversely affect our business, results of operations, prospects and financial condition. Additional risks and uncertainties
not currently known to us or that we currently deem immaterial may also materially and adversely affect our business, results of
operations, prospects and financial condition. In either event, the market price of our series B shares and ADSs could decline
significantly, and you could lose all or substantially all of your investment.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Risks Related to Our Business</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our results of operations are significantly influenced
by the cyclical nature of steel industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The steel industry is highly cyclical
and sensitive to regional and global macroeconomic conditions. Global demand for steel as well as global production capacity levels
significantly influence prices for our products, and changes in global demand or supply for steel in the future will likely impact
our results of operations. The steel industry has suffered in the past, especially during downturn cycles, from substantial over-capacity.
Currently, as a</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">result
of the recent global economic recession and the increase in steel production capacity in recent years, there are signs of excess
capacity in steel markets, which is impacting the profitability of the steel industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Global steel prices increased significantly
during 2004, fell in 2005, increased again in first three quarters of 2006, then weakened in the last quarter of 2006 and in 2007
remained similar to prices in 2006. In 2008, global steel prices increased during the first three quarters of 2008, but weakened
significantly in the last quarter of 2008 and 2009 as a result of the global economic recession. In 2010 and 2011, global steel
prices began to recover and then remained relatively stable. We cannot give you any assurance as to prices of steel in the future.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We may not be able to pass along price increases
for raw materials to our customers to compensate for fluctuations in price and supply.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Prices for raw materials necessary for
production of our steel products have fluctuated significantly in the past and significant increases in raw material prices could
adversely affect our gross profit. During periods when prices for scrap metal, iron ore, ferroalloys, coke and other raw materials
have increased, our industry has historically sought to maintain profit margins by passing along increased raw materials costs
to customers by means of price increases. For example, prices of scrap metal decreased approximately 24% in 2009, increased approximately
34% in 2010 and increased approximately 21% in 2011; and prices of ferroalloys decreased approximately 43% in 2009, increased approximately
22% in 2010 and increased approximately 10% in 2011. As with other raw materials, iron ore and coke prices fluctuated significantly;
however, in 2009, 2010 and 2011 we did not purchase iron ore pellets or coke since our Lorain, Ohio blast furnace facility, which
is our only facility that utilizes these materials, was idle during this period. We may not be able to pass along these and other
cost increases in the future and, therefore, our profitability may be materially and adversely affected. Even when we can successfully
increase our prices, interim reductions in profit margins frequently occur due to a time lag between the increase in raw material
prices and the market acceptance of higher selling prices for finished steel products. We cannot assure you that our customers
will agree to pay increased prices for our steel products that compensate us for increases in our raw material costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We purchase our raw material requirements
either in the open market or from certain key suppliers. Both scrap metal and ferroalloy prices are negotiated on a monthly basis
with our suppliers and are subject to market conditions. We cannot assure you that we will be able to continue to find suppliers
of these raw materials in the open market, that the prices of these materials will not increase or that the quality will remain
the same. In addition, if any of our key suppliers fails to deliver or we fail to renew our supply contracts, we could face limited
access to some raw materials, or higher costs and delays resulting from the need to obtain our raw materials requirements from
other suppliers.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">The energy costs involved in our production processes
are subject to fluctuations that are beyond our control and could significantly increase our costs of production.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our production processes are dependent
on adequate supplies of electricity and natural gas. A substantial increase in the cost of electricity or natural gas could have
a material adverse effect on our gross profit. In addition, a disruption or curtailment in supply could have a material adverse
effect on our production and sales. Prices for electricity increased approximately 17% in 2009, 8% in 2010 and 11% in 2011; and
prices for natural gas decreased approximately 10% in 2009, 18% in 2010 and 14% in 2011. Moreover, energy costs constitute a significant
and increasing component of our costs of operations; energy cost as a percentage of the manufacturing conversion cost was 12% for
2011 compared to 13% for 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican government is currently the
only supplier of energy in Mexico and has, in some cases, increased prices above international levels. We, like all other high
volume users of electricity in Mexico, pay special rates to the Mexican federal electricity commission (<I>Comisi&oacute;n Federal
de Electricidad </I>or &ldquo;CFE&rdquo;) for electricity. We also pay special rates to Pemex, Gas y Petroqu&iacute;mica B&aacute;sica,
(&ldquo;PEMEX&rdquo;), the national oil company, for natural gas used at our facilities in Mexico. We cannot assure you that these
special rates will continue to be available to us or that these rates may not increase significantly in the future. In the United
States, we have contracts in place with special rates from the electric utilities. We cannot assure you that these special rates
will continue to be available to us or that these rates may not increase significantly in the future. In certain deregulated electric
markets in the United States, we have third party electric generation contracts under a fixed price arrangement. These contracts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">mitigate
our price risk for electric generation from the volatility in the electric markets. In addition, we purchase natural gas from
various suppliers in the United States and Canada. These purchase prices are generally established as a function of monthly New
York Mercantile Exchange settlement prices. We also contract with different natural gas transportation and storage companies to
deliver the natural gas to our facilities. In addition, we enter into futures contracts to fix and reduce volatility of natural
gas prices both in Mexico and the United States. As of December 31, 2011, we have entered into derivative financial instruments
in Mexico and the United States to cover risks of fluctuations in the price of natural gas with PEMEX and Hess Corporation. We
have not always been able to pass the effect of increases in our energy costs on to our customers and we cannot assure you that
we will be able to pass the effect of these increases on to our customers in the future. We also cannot assure you that we will
be able to maintain futures contracts to reduce volatility in natural gas prices. Changes in the price or supply of electricity
or natural gas would materially and adversely affect our business and results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We face significant competition from other steel
producers, which may adversely affect our profitability and market share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Competition in the steel industry is
significant. Competition in the steel industry exerts a downward pressure on prices, and, due to high start-up costs, the economics
of operating a steel mill on a continuous basis may encourage mill operators to establish and maintain high levels of output even
in times of low demand, which further decreases prices and profit margins. The recent trend of consolidation in the global steel
industry may further increase competitive pressures on independent producers of our size, particularly if large steel producers
formed through consolidations, which have access to greater resources than us, adopt predatory pricing strategies that decrease
prices and profit margins. If we are unable to remain competitive with these producers, our profitability and market share would
likely be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A number of our competitors in Mexico,
the United States and Canada have undertaken modernization and expansion plans, including the installation of production facilities
and manufacturing capacity for certain products that compete with our products. As these producers become more efficient, we will
face increased competition from them and may experience a loss of market share. In each of Mexico, the United States and Canada
we also face competition from international steel producers. Increased international competition, especially when combined with
excess production capacity, would likely force us to lower our prices or to offer increased services at a higher cost to us, which
could materially reduce our profit margins.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Competition from other materials could significantly
reduce demand and market prices for steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In many applications, steel competes
with other materials that may be used as steel substitutes, such as aluminum (particularly in the automobile industry), cement,
composites, glass, plastic and wood. Additional substitutes for steel products could significantly reduce demand and market prices
for steel products and thereby affect our results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">A sudden slowdown in consumption in or increase
in exports from China could have a significant impact on international steel prices affecting our profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As demand for steel has surged in China,
steel production capacity in that market has also increased, and China is now the largest worldwide steel producing country, accounting
for approximately half of the worldwide steel production. Due to the size of the Chinese steel market, a slowdown in steel consumption
in that market could cause a sizable increase in the volume of steel offered in the international steel markets, exerting a downward
pressure on sales and margins of steel companies operating in other markets and regions, including us.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Implementing our growth strategy, which may include
additional acquisitions, may adversely affect our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As part of our growth strategy, we may
seek to expand our existing facilities, build additional plants, acquire steel production assets, enter into joint ventures or
form strategic alliances that we expect will expand or complement our existing business. If we undertake any of these transactions,
they will likely involve some or all of the following risks:</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>diversion of our resources and of management&rsquo;s time;</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>increased likelihood of involvement in labor, commercial or regulatory disputes or litigation related to the new enterprise;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>potential liability to joint venture participants or to third parties;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>difficulty competing for acquisitions and other growth opportunities with companies having greater financial resources; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>difficulty integrating the acquired operations and personnel into our existing business.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We will require significant capital for
acquisitions and other strategic plans, as well as for the maintenance of our facilities and compliance with environmental regulations.
We may not be able to fund our capital requirements from operating cash flow and we may be required to issue additional equity
or debt securities or obtain additional credit facilities, which could result in additional dilution to our shareholders. We cannot
assure you that adequate equity or debt financing would be available to us on favorable terms or at all. If we are unable to fund
our capital requirements, we may not be able to implement our growth strategy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We intend to continue to pursue a growth
strategy, the success of which will depend in part on our ability to acquire and integrate additional facilities. Some of these
acquisitions may be outside of Mexico, the United States and Canada. Acquisitions involve a number of special risks, in addition
to those described above, that could adversely affect our business, financial condition and results of operations, including the
assumption of legacy liabilities and the potential loss of key employees. We cannot assure you that any acquisition we make will
not materially and adversely affect us or that any such acquisition will enhance our business. We are unable to predict the likelihood
of any additional acquisitions being proposed or completed in the near future or the terms of any such acquisitions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We and our auditors have identified material
weaknesses in our internal controls over financial reporting, for each of the last three years, and if we fail to remediate these
material weaknesses and achieve an effective system of internal controls, we may not be able to report our financial results accurately,
and current and potential shareholders could lose confidence in our reporting, which would harm our business and the trading price
of our Series B shares or the ADSs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In connection with the preparation of
our financial statements as of and for each of the years ended December 31, 2009, 2010 and 2011, we and our auditors identified
material weaknesses (as defined under standards established by the Public Company Accounting Oversight Board) in our internal controls
over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements
will not be prevented or detected on a timely basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Fiscal Year Ended December 31, 2009</I>.
In the course of the preparation of our consolidated financial statements for the years ended December 31, 2009, our management
identified the following material weaknesses:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>The structure of our finance department proved to be insufficient insofar as it did not allow for adequate segregation of duties
with respect to the supervision and review procedures for the assessment of deferred taxes and for the closing of our financial
statements.</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>The personnel of our finance department lacked the requisite level of knowledge and specialization to calculate asset impairments
and conversion between MFRS and U.S. GAAP and the conversion of the financial statements of our foreign subsidiaries to MFRS.</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Our growth also had an adverse impact on our ability to maintain adequate control over our preparation of consolidated financial
information which has become more complex. The preparation of consolidated financial information was carried out through the use
of electronic Excel sheets and a partially integrated system which relied on the use of different software by various subsidiaries,
rather than through a company-wide, integrated consolidation system. The situation described above did not allow for a proper supervision
of the consolidation process during 2009.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, in the course of the audit
of the consolidated financial statements of our subsidiary SimRep Corporation (&ldquo;SimRep&rdquo;) and its subsidiaries, including
Republic Engineered Products, Inc. (&ldquo;Republic&rdquo;), for the year ended December 31, 2009 and of internal control over
financial reporting as of December 31, 2009, our external auditor identified certain accounting entries that it concluded were
not in compliance with U.S. GAAP. In connection with these entries, our external auditor requested that certain audit adjustments
be made, and SimRep made those adjustments. Republic Engineered Products, Inc. changed its name on September 2011 to Republic Steel
Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 29, 2010, our external auditor
notified our audit and corporate practices committee (&ldquo;Audit Committee&rdquo;) and certain members of the management of Republic
that it had identified, during its audit of the financial statements of SimRep and its subsidiaries for the year ended December
31, 2009, what it considered, under standards established by the Public Company Accounting Oversight Board, to be material weaknesses
in internal control over financial reporting at the SimRep evaluation level. Specifically, our external auditor noted material
weaknesses with regard to what it characterized as &ldquo;management override of internal controls&rdquo; and identified five specific
&ldquo;management overrides.&rdquo; In addition, our external auditor also noted material weaknesses in internal control over financial
reporting with regard to SimRep&rsquo;s adherence to its written policies with regard to accounting for working capital and fixed
asset accounts. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">For information on the remedial measures
adopted by us to address the material weaknesses identified during the preparation of our financial statements for the year ended
December 31, 2009, see Item 15.D &ldquo;Controls and Procedures&mdash;Changes in Internal Control Over Financial Reporting&rdquo;
elsewhere in this Annual Report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Fiscal Year Ended December 31, 2010</I>.
On July 12, 2011, our external auditors issued a report that concluded that we do not maintain effective internal control over
financial reporting with respect to our financial statements as of December 31, 2010 and identified the following material weaknesses:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>there were significant deficiencies in our entity-level controls and control environment that could affect the effectiveness
of the internal controls and which together constitute a material weakness;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the structure of our finance department proved to be insufficient insofar as it did not allow for adequate segregation of duties
with respect to the supervision and review procedures and the total accounting errors adjusted for this matter were considered
material to our consolidated financial statements for 2010;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the preparation of consolidated financial information was carried out through the use of electronic Excel sheets and a partially
integrated system which relied on the use of different software by various subsidiaries, rather than through a company-wide, integrated
consolidation system; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the structure of the finance department of SimRep was also found to be insufficient to reconcile certain balance sheet accounts
at the detailed level and did not allow for adequate segregation of duties with respect to the supervision and review procedures
for the reconciliation of prepaid balances and the closing of their financial statements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Fiscal Year Ended December 31, 2011</I>.
On January 12, 2012, our Audit Committee received a formal complaint from the General Accounting and Treasury Services Manager
of Republic, stating that he had identified, during his review of the financial statements of SimRep and its subsidiaries for the
year ended December 31, 2011, what he considered to be material accounting errors, and potential &ldquo;management override of
internal controls&rdquo; at SimRep. In response, our Audit Committee instructed our internal audit department to perform a review,
and subsequently engaged outside counsel to conduct an internal investigation concerning the accounting matters and potential management
overrides of internal controls at SimRep. As a result of our investigation, we have identified material weakness at SimRep, finding
that, with respect to SimRep and its subsidiaries, management did not design and maintain effective controls relating to the year-end
closing and financial reporting process, resulting in accounting errors with respect to the reconciliation of certain balance sheet
accounts, and a failure to timely review and control the preparation and closing of SimRep&rsquo;s consolidated financial statements.
In addition, SimRep also had insufficient personnel resources and technical accounting and reporting expertise to appropriately
address certain accounting and financial reporting matters in accordance with generally accepted accounting principles. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, our external auditors notified
our management that, during their audit of our consolidated financial statements for the year ended December 31, 2011, it identified
what it considered to be, under standards established by the Public Company Accounting Oversight Board, material weaknesses in
internal controls over financial reporting:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Significant deficiencies were detected regarding entity-level controls and control environment which, in the aggregate, constitute
a material weakness, and which include (i) ineffective controls in the patents registry; (ii) inadequate resources and inadequate
distribution of duties among personnel, resulting in too many functions centralized among too few personnel; (iii) out-of-date
accounting and human resources policies and information technology procedures, and a lack of proper monitoring of the foregoing;
(iv) a lack of adequate implementation of our ethical code; (v) failure to integrate all control processes into an Enterprise Resource
Planning (ERP) system; (vi) a lack of an accounting manual (including instructions on accounting recordkeeping) for the entire
company; (vii) failure to create and implement a training plan for management personnel preparing financial records; and (viii)
failure of audit personnel to report periodically to the Audit Committee in order to monitor the remediation procedures previously
adopted with respect to previous accounting periods;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>A lack of appropriate accounting resources, which led to inadequate supervision and controls within the accounting department
and therefore prejudiced the financial statement closing process, the deferred income tax process and the conversion of foreign
subsidiaries process, resulting in material accounting errors;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>A lack of an appropriate consolidation system to allow management to supervise properly the preparation of consolidated financial
information. Financial information of subsidiaries was presented at a level of detail that was insufficient to allow for a clear
and precise understanding of operations; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>A lack of appropriate accounting resources at SimRep, which led to material weaknesses with respect to SimRep&rsquo;s internal
controls over financial reporting, which resulted in material corrections to its consolidated financial statements. Such material
weaknesses included: (i) a lack of proper controls to reconcile certain balance sheet accounts at a detailed level, including certain
accounts payable debit balances that could not be substantiated, resulting in audit adjustments; (ii) financial close control failure
due to lack of timely review of monthly financial statements; (iii) a necessity to perform several reclassifications to basic financial
statements and adjustments to the footnotes after the auditors&rsquo; review of such financial statements; and (iv) a lack of appropriate
expertise at SimRep to address technical accounting and financial reporting matters.</TD></TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt">
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-size: 10pt">Significant deficiencies were also detected at our subsidiary Corporaci&oacute;n Aceros DM, S.A.
de C.V. which, in the aggregate constitute a material weakness, which significant deficiencies include (i) lack of physical inventory
of fixed assets; (ii) lack of proper segregation of duties, analysis and authorization of personnel access to main information
systems; (iii) lack of evidence of reconciliation of physical and accounting information of raw material inventory; (iv) lack of
evidence of review of interim financial statements; and (v) failure to document and communicate adequately responsibilities and
authority of key financial roles.</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 25, 2012, our Audit Committee
adopted a series remedial measures to address the material weaknesses in our internal controls including the following:</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Republic will improve internal controls with respect to valuation and accounting, including the adoption of a written policy
with specific procedures and criteria with respect thereto and clear instructions for reporting to Grupo Simec. Grupo Simec will
institute procedures, including visitations, to ensure that Republic complies with the newly adopted policy and process and with
instructions from Grupo Simec, and to ensure that SimRep&rsquo;s CEO does not influence accounting matters.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Republic&rsquo;s management will communicate a clear commitment throughout the organization to timely and accurate financial
reporting, including providing sufficient accounting staff who are adequately trained, improving written accounting policies, and
establishing a constructive climate among management.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Republic will improve the accounting and financial reporting expertise of senior financial executives. Republic&rsquo;s CFO
will not provide input on general accounting and financial reporting matters and will follow directives from, and, along with Republic&rsquo;s
CFO, will provide certifications of compliance to Grupo Simec&rsquo;s CFO on accounting and financial reporting matters.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Grupo Simec will open a clear direct line of communication between each of Republic&rsquo;s CFO and Controller, on the one
hand, and Grupo Simec&rsquo;s CFO, on the other hand, on all significant accounting matters. Such communications will not be dependent
on Republic CEO&rsquo;s involvement, approval or consent.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Republic will monitor compliance by adding a full-time internal auditor to help design, implement and monitor the continuing
effectiveness of internal controls, and by performing quarterly financial reviews to ensure timelier reporting and resolution of
accounting issues or concerns.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Republic will improve its current whistleblower procedures in order to enable members of Republic&rsquo;s accounting staff
to report problems anonymously, establish a confidential procedure for reporting accounting concerns, provide training to staff
on these procedures, and communicate to all employees the importance of anonymity of the complaints.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">See Item 15.B &ldquo;Controls and Procedures&mdash;Management&rsquo;s
Annual Report on Internal Control Over Financial Reporting &ndash; Material Weaknesses&rdquo; and Item 15.C &ldquo;Attestation
Report of the Independent Registered Public Accounting Firms&rdquo; and Item 15.D &ldquo;Changes in Internal Control over Financial
Reporting&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Any failure to implement and maintain
the needed improvements in the controls over our financial reporting, or difficulties encountered in the implementation of these
improvements in our controls, could result in a material misstatement in our annual or interim financial statements that would
not be prevented or detected, or cause us to fail to meet our reporting obligations under applicable securities laws. Any failure
to improve our internal controls to address the identified weaknesses could result in our incurring substantial liability for not
having met our legal obligation and could also cause investors to lose confidence in our reported financial information, which
could have a material adverse impact on the trading price of our Series B shares or the ADSs.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Tariffs, anti-dumping and countervailing duty
claims imposed in the future could harm our ability to export our products outside of Mexico, and changes in Mexican tariffs on
steel imports could adversely affect the profitability and market share of our Mexican steel business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A substantial part of our operations
are outside the United States, and we export products from those facilities to the United States. In the past, the U.S. government
has imposed anti-dumping and countervailing duties against Mexican and other foreign steel producers, but has not imposed any such
penalties against us or our products. In the first quarter of 2002, the U.S. government imposed tariffs of 15% on rebar and 30%
on hot rolled bar and cold finish bar against imports of steel from all countries with the exception of Mexico, Canada, Argentina,
Thailand and Turkey; in the first quarter of 2003, the tariffs were reduced to 12% on rebar and 24% on hot rolled bar and cold
finish bar, and these tariffs were eliminated in late 2003, prior to their originally scheduled termination date. We cannot assure
you that anti-dumping or countervailing duties suits will not be initiated against us, or that</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">the U.S.
government will not impose tariffs on steel imports from Mexico, and if this were to occur it could materially and adversely affect
our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In September 2001, the Mexican government
imposed tariffs of 25% against imports for all products that we produce from all countries with the exception of those which have
a free trade agreement with Mexico, which includes the United States. In April 2002, the Mexican government increased these tariffs
to 35%. These tariffs have subsequently been reduced over time and currently range from 3% to 5% for steel products. We cannot
assure you that these tariffs will not be further reduced or eliminated or that countries seeking to export steel products to Mexico
will not impose similar tariffs on Mexican exports to those countries, and in either case such developments could have a material
adverse effect on our financial condition and results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">The operation of our facilities depends on good
labor relations with our employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">At December 31, 2011, approximately 82%
of our non-Mexican and 56% of our Mexican employees were members of unions. The compensation terms of our labor contracts are adjusted
on an annual basis, and all other terms of the labor contracts are renegotiated every two years. In addition, collective bargaining
agreements are typically negotiated on a facility-by-facility basis for our Mexican facilities. Any failure to reach an agreement
on new labor contracts or to negotiate these labor contracts could result in strikes, boycotts or other labor disruptions. These
potential labor disruptions could have a material and adverse effect on our business. Labor disruptions or significant negotiated
wage increases could reduce our sales or increase our cost, and accordingly could have a material adverse effect on our results
of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Operations at our Lackawanna, New York facility
depend on our continuing right to use certain property and assets of an adjoining facility, and the termination of any such rights
would interrupt our operations and have a material adverse effect on our results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The operations of our Lackawanna facility
depend upon certain arrangements and understandings relating to, among other things, our use of industrial water, compressed air,
sanitary sewer and electrical power. These service and utility arrangements, initially entered into with the Mittal Steel Company
N.V. and its affiliates (&ldquo;Mittal Steel&rdquo;), were effective through April 30, 2009, at which time Mittal Steel transferred
its Lackawanna plant to Tecumseh Redevelopment, Inc. (&ldquo;Tecumseh&rdquo;). In December 2010, Tecumseh transferred a portion
of the former Mittal Steel facility to Great Lakes Industrial Development, LLC (&ldquo;GLID&rdquo;). Upon the transfer to GLID,
we entered into a written agreement with GLID regarding the provision of compressed air to our facility. This lease assures that
compressed air will be provided to our facility during the lease term (initially two years with automatic one year renewals until
terminated by either party) and grants us an option to purchase the equipment at various times and at stated prices, thereby providing
us some flexibility while we consider the installation of our own compressed air system at our facility. The water pump that services
our plant is located on property still owned by Mittal Steel and is maintained by Mittal Steel, which also continues to furnish
industrial water to us on a month-to-month basis. The electric system which services the compressed air equipment, as well as the
electric system which services the GLID property, has been re-routed through our electric meter located at a substation on the
adjacent GLID property. We continue to pursue a written agreement with GLID covering our use of the electric substation and related
equipment on the GLID property, as well as the sanitary sewer lift station on the GLID property that serves our facility, and a
truck entrance and security monitoring equipment located on the GLID property. All of these rights are essential to the use and
operation of our Lackawanna facility. It is our understanding that GLID has sold or is in the process of selling a portion of its
property to an unrelated third party. In the event of a termination of any of our rights, either due to a failure to negotiate
a satisfactory outcome with Mittal Steel, GLID or any third party to which it sells all or part of its facility, or for any other
reason, we could be required to cease all or substantially all of our operations at the Lackawanna facility. Because we produce
certain types of products in our Lackawanna facility that we do not produce in our other facilities, an interruption of production
at our Lackawanna facility would result in a substantial loss of revenue and could damage our relationships with customers.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our sales in the United States are concentrated
and could be significantly reduced if one of our major customers reduced its purchases of our products or was unable to fulfill
its financial obligations to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our sales in the United States are concentrated
among a relatively small number of customers. Any of our major customers can stop purchasing our products or significantly reduce
their purchases at any time. During 2011,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">2010 and
2009, sales to our ten largest customers in the United States accounted for approximately 40.4%, 38.6% and 39.2% of our consolidated
revenues in the United States, respectively, and approximately 19.5%, 19% and 16% of our total consolidated revenues, respectively.
A disruption in sales to one or more of our largest customers would adversely affect our cash flow and results of operations.
Starting in the fourth quarter of 2008, due to the U.S. financial crisis and the ensuing worldwide economic recession, all of
our top ten customers have suffered reduced demand for their products. This reduction in demand has in turn adversely affected
our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We cannot assure you that we will be
able to maintain our current level of sales to our largest customers or that we will be able to sell our products to other customers
on terms that are favorable to us. The loss of, or substantial decrease in the amount of purchases by, or a write-off of any significant
receivables from, any of our major customers would materially and adversely affect our business, results of operations, liquidity
and financial condition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Unanticipated problems with our manufacturing
equipment and facilities could have an adverse impact on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our capacity to manufacture steel products
depends on the suitable operation of our manufacturing equipment, including blast furnaces, electric arc furnaces, continuous casters,
reheating furnaces and rolling mills. Breakdowns requiring significant time and/or resources to repair, as well as the occurrence
of unexpected adverse events, such as fires, explosions or adverse meteorological conditions, could cause production interruptions
that could adversely affect our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have not obtained insurance against
all risks, and do not maintain insurance covering losses resulting from catastrophes or business interruptions. In the event we
are not able to quickly and cost-effectively remedy problems creating any significant interruption of our manufacturing capabilities,
our operations could be adversely affected. In addition, in the event any of our plants were destroyed or significantly damaged
or its production capabilities otherwise significantly decreased, we would likely suffer significant losses, and capital investments
necessary to repair any destroyed or damaged facilities or machinery would adversely affect our profitability, liquidity and financial
condition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">If we are unable to obtain or maintain quality
and environmental management certifications for our facilities, we may lose existing customers and fail to attract new customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Most of our automotive parts customers
in Mexico and the United States require that we have ISO 9001, TS 16949 and ISO 14001 certification. All of the Mexican and U.S.
facilities that sell to automotive parts customers are currently certified, as required. If the foregoing certifications are canceled,
if approvals are withdrawn or if necessary additional standards are not obtained in a timely fashion, our ability to continue to
serve our targeted market, retain our customers or attract new customers may be impaired. For example, our failure to maintain
these certifications could cause customers to refuse shipments which could materially and adversely affect our revenues and results
of operations. We cannot assure you of our future compliance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In the SBQ market, all participants must
satisfy quality audits and obtain certifications in order to obtain the status of &ldquo;approved supplier.&rdquo; The automotive
industry has put these stringent conditions in place for the production of auto parts to assure a vehicle&rsquo;s quality and safety.
We currently are an approved supplier for our automotive parts customers. Maintaining these certifications is key to preserving
our market share, because they can be a barrier to entry in the SBQ market, and we cannot assure you that we will be able to do
so.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">In the event of environmental violations at our
facilities we may incur significant liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our operations are subject to a broad
range of environmental laws and regulations regulating our impact on air, water, soil and groundwater and exposure to hazardous
substances. The costs of complying with, and the imposition of liabilities pursuant to, environmental laws and regulation can be
significant. Despite our efforts to comply with environmental laws and regulations, environmental incidents or events that negatively
affect the operations of our facilities may occur. In addition, we cannot assure you that we will at all times operate in compliance
with environmental laws and regulations. If we fail to comply with these laws and regulations, we may</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">be assessed
fines or penalties, be required to make large expenditures to comply with such laws and regulations, or be forced to shut down
non-compliant operations and face lawsuits by third parties. In addition, environmental laws and regulations are becoming increasingly
stringent and it is possible that future laws and regulations may require us to undertake material environmental compliance expenditures
and require modifications in our operations. Furthermore, we need to maintain existing and obtain future environmental permits
in order to operate our facilities. The failure to obtain necessary permits or consents or the loss of any permits could result
in significant fines or penalties or prevent us from operating our facilities. We may also be subject, from time to time, to legal
proceedings brought by private parties or governmental agencies with respect to environmental matters, including matters involving
alleged property damage or personal injury that could result in significant liability. Certain of our facilities in the United
States have been the subject of administrative action by federal, state and local environmental authorities. See Item 8. &ldquo;Financial
Information&mdash;Legal Proceedings.&rdquo;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Greenhouse gas policies and regulations, particularly
any binding restriction on emissions of greenhouse gases such as carbon dioxide, could negatively impact our steelmaking operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our integrated steel making operation
at Republic&rsquo;s Lorain, Ohio facility involves carbon and generates significant amounts of carbon dioxide (CO2), while our
other steel making operations in the United States and in Mexico use electric arc furnaces where carbon dioxide generation is primarily
linked to energy use. In the United States, the Environmental Protection Agency has issued rules imposing inventory and reporting
obligations to which some of our facilities are subject, and has also issued rules that will affect preconstruction permits for
our facilities where increases in greenhouse gas pollutants are contemplated. The U.S. Congress has debated various measures for
regulating greenhouse gas emission (such as carbon dioxide) and may enact them in the future. Such laws and regulations may also
result in higher costs for coking coal, natural gas and electricity generated by carbon-based systems (such as coal-fired electric
generating facilities). Canada&rsquo;s federal government is also considering various approaches for reducing greenhouse gas emissions,
although we do not presently believe Republic&rsquo;s Hamilton, Ontario facility would be significantly impacted by these efforts
since it is not a steel-producing facility. Such future laws and regulations, whether in the form of cap-and-trade emissions permit
system, a carbon tax or other regulatory regime may have a negative effect on our operations. Additionally, international negotiations
to supplement and eventually replace the 1997 Kyoto Protocol are ongoing. The outcome of those negotiations or whether any of the
countries in which we operate will sign on the resulting agreement is unknown. More stringent greenhouse gas policies and regulations
could adversely affect our business and results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">If we are required to remediate contamination
at our facilities we may incur significant liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Certain of our U.S. facilities are currently
engaged in the investigation and/or remediation of environmental contamination. Most of these investigations relate to legacy activities
by prior owners. We may in the future be subject to similar investigations or required to undertake similar remediation measures
at other facilities. We recognize a liability for environmental remediation when it becomes probable that such remediation will
be required and the amount can be reasonably estimated. As estimated costs to remediate change, or when new liabilities become
probable, we adjust the record liabilities accordingly. However, due to the numerous variables associated with the judgments and
assumptions that are part of these estimates and changes in governmental regulations and environmental technologies over time,
we cannot assure you that our environmental reserves will be adequate to cover such liabilities or that our environmental expenditures
will not differ significantly from our estimates or materially increase in the future. Failure to comply with any legal obligations
requiring remediation of contamination could result in liabilities, imposition of cleanup liens and fines, and we could incur large
expenditures to bring our facilities into compliance.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We could incur losses due to product liability
claims and may be unable to maintain product liability insurance on acceptable terms, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We could experience losses from defects
or alleged defects in our steel products that subject us to claims for monetary damages. For example, many of our products are
used in automobiles and light trucks and it is possible that a defect in one of these vehicles would result in product liability
claims against us. In accordance with normal commercial sales, some of our products include implied warranties that they are free
from defects, are suitable for their intended purposes and meet certain agreed upon manufacturing specifications. We cannot assure
you that future product liability claims will not be brought against us, that we will not incur liability in excess of our</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0pt; text-indent: 20pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">insurance
coverage, or that we will be able to maintain product liability insurance with adequate coverage levels and on acceptable terms,
if at all.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our controlling shareholder, Industrias CH, is
able to exert significant influence on our business and policies and its interests may differ from those of other shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of April 25, 2012, Industrias CH,
which the chairman of our board of directors, Rufino Vigil Gonz&aacute;lez, controls, owned approximately 84% of our shares. Industrias
CH nominated and elected all of the current members of our board of directors, and Industrias CH is in a position to exercise substantial
influence and control over our business and policies, including the timing and payment of dividends. The interests of Industrias
CH may differ significantly from those of other shareholders. Furthermore, as a result of the significant equity position of Industrias
CH, there is currently limited liquidity in our series B shares and the ADSs.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We have had a number of transactions with our
affiliates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Historically, we have engaged in a number
and variety of transactions on market terms with affiliates, including entities that Industrias CH owns or controls. We expect
that in the future we will continue to enter into transactions with our affiliates, and some of these transactions may be significant.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We depend on our senior management and their
unique knowledge of our business and of the SBQ industry, and we may not be able to replace key executives if they leave.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We depend on the performance of our executive
officers and key employees. Our senior management has significant experience in the steel industry, and the loss of any member
of senior management or our inability to attract and retain additional senior management could materially and adversely affect
our business, results of operations, prospects and financial condition. We believe that the SBQ steel market is a niche market
where specific industry experience is key to success. We depend on the knowledge of our business and the SBQ industry of our senior
management team, including Luis Garcia Limon, our chief executive officer. In addition, we attribute much of the success of our
growth strategy to our ability to retain most of the key senior management personnel of the companies and businesses that we have
acquired. Competition for qualified personnel is significant, and we may not be able to find replacements with sufficient knowledge
of, and experience in, the SBQ industry for our existing senior management or any of these individuals if their services are no
longer available. Our business could be adversely affected if we cannot attract or retain senior management or other necessary
personnel.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our tax liability may increase if the tax laws
and regulations in countries in which we operate change or become subject to adverse interpretations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Taxes payable by companies in the countries
in which we operate are substantial and include income tax, value-added tax, excise duties, profit taxes, payroll related taxes,
property taxes and other taxes. Tax laws and regulations in some of these countries may be subject to change, varying interpretation
and inconsistent enforcement. Ineffective tax collection systems and continuing budget requirements may increase the likelihood
of the imposition of onerous taxes and penalties which could have a material adverse effect on our financial condition and results
of operations. In addition to the usual tax burden imposed on taxpayers, these conditions create uncertainty as to the tax implications
of various business decisions. This uncertainty could expose us to significant fines and penalties and to enforcement measures
despite our best efforts at compliance, and could result in a greater than expected tax burden. In addition, many of the jurisdictions
in which we operate have adopted transfer pricing legislation. If tax authorities impose significant additional tax liabilities
as a result of transfer pricing adjustments, it could have a material adverse effect on our financial condition and results of
operations. It is possible that tax authorities in the countries in which we operate will introduce additional revenue raising
measures. The introduction of any such provisions may affect our overall tax efficiency and may result in significant additional
taxes becoming payable. Any such additional tax exposure could have a material adverse effect on our financial condition and results
of operations.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Risks Related to Challenging Global Economic Conditions</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Global economic conditions, such as the recent
financial crisis and economic recession that occurred during 2008 and 2009, may significantly impact our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The financial crisis that began in the
United States in 2008 led to a global recession in which overall economic activity decreased across the world generally and in
North America in particular. The corresponding reduction in demand across the economy in general and in the automotive, construction
and manufacturing sectors in particular has reduced demand for steel products in North America and globally. These economic conditions
significantly impacted our business and results of operations. Although demand, production levels and prices in certain segments
and markets have recovered and stabilized to a certain degree, the extent, timing and duration of the recovery and potential return
to pre-crisis levels remains uncertain. If global macroeconomic conditions deteriorate, however, the outlook for steel producers
would be adversely affected. It is difficult to predict the duration or severity of a new global economic downturn, or to what
extent it will affect us. An unsustainable recovery and persistently weak economic conditions in our key markets could depress
demand for our products and adversely affect our business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, in 2009, the decreased demand
in the construction sector had a negative impact on our San Luis facilities, since these facilities produce mostly rebar and mesh.
Under MFRS, when assessing the recoverability of the goodwill and other intangibles, we must make assumptions regarding estimated
future cash flows and other factors to determine the fair value of the respective assets. As of December 31, 2009, this reporting
unit did not exceed its respective carrying value; therefore, we determined there was an impairment of goodwill in the amount of
Ps. 2,368 million in the Grupo San unit. Assumptions used in the analysis considered the market conditions in developing short
and long-term growth expectations. If global economic conditions deteriorate, we may be required to undertake additional asset
impairments.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our end-product markets have been severely affected
by the recent global recession.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We sell our products to the automotive
and construction-related industries, both of which have reported substantially lower customer demand due to the recent global recession.
As a result, our operating levels declined and will remain at depressed levels, compared to pre-recession levels, until demand
in end-product markets increases. While some of our end-product markets, such as the automotive industry, experienced modest recoveries
during 2010, others, such as the construction industry, remain depressed. In addition to slackening demand by end consumers, we
believe that some of our customers are experiencing difficulty in obtaining credit or maintaining their ability to qualify for
trade credit insurance, resulting in a further reduction in purchases and an increase in our credit risk exposure. The trajectory
of the recovery of these industries may have a significant impact on our results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">We may face increased risks of customer and supplier
defaults.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">There is an increased risk of insolvency
and other credit related issues of our customers, particularly those in industries that were hard hit by the recent recession,
such as automotive, construction and appliance. Also, there is the possibility that our suppliers may face similar risks. This
decrease in available credit may increase the risk of our customers defaulting on their payment obligations to us and may cause
some of our suppliers to be delayed in filling or to be unable to fill our needs.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Because a significant portion of our sales are
to the automotive industry, a decrease in automotive manufacturing could reduce our cash flows and adversely affect our results
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Direct sales of products to automotive
assemblers and manufacturers accounted for approximately 36% of our net sales of SBQ in 2011. Demand for our products is affected
by, among other things, the relative strength or weakness of the North American automotive industry. North American industry production
manufacturers have experienced significant reductions in market share to mostly Asian companies and in the past have undertaken
reductions in working capacity. In addition, during the recent financial crisis and economic recession many large original equipment
manufacturers and two of the largest North American automobile manufacturers sought</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">bankruptcy
protection. A reduction in vehicles manufactured in North America, the principal market for Republic&rsquo;s SBQ steel products,
would have an adverse effect on our results of operations. We also sell to independent forgers, components suppliers and steel
service centers, all of which sell to the automotive market as well as other markets. Developments affecting the North American
automotive industry may adversely affect us.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our customers in the automotive industry continually
seek to obtain price reductions from us, which may adversely affect our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A challenge that we and other suppliers
of intermediary products used in the manufacture of automobiles face is continued price reduction pressure from our customers in
the automobile manufacturing business. Downward pricing pressure has been a characteristic of the automotive industry in recent
years and it is migrating to all our vehicular markets. Virtually all automobile manufacturers have aggressive price reduction
initiatives that they impose upon their suppliers, and such actions are expected to continue in the future. In the face of lower
prices to customers, we must continue to reduce our operating costs in order to maintain profitability. We have taken and continue
to take steps to reduce our operating costs to offset customer price reductions; however, price reductions are adversely affecting
our profit margins and are expected to do so in the future. If we are unable to offset customer price reductions through improved
operating efficiencies, new manufacturing processes, sourcing alternatives, technology enhancements and other cost reduction initiatives,
or if we are unable to avoid price reductions from our customers, our results of operations could be adversely affected.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Sales may fall as a result of fluctuations in
industry inventory levels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Inventory levels of steel products held
by companies that purchase our products can vary significantly from period to period. These fluctuations can temporarily affect
the demand for our products, as customers draw from existing inventory during periods of low investment in construction and the
other industry sectors that purchase our products and accumulate inventory during periods of high investment and, as a result,
these companies may not purchase additional steel products or maintain their current purchasing volume. Accordingly, we may not
be able to increase or maintain our current levels of sales volumes or prices.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Risks Related to Mexico</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Adverse economic conditions in Mexico may adversely
affect our financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A substantial portion of our operations
are conducted in Mexico and our business is affected by the performance of the Mexican economy. The recent global credit crisis
and the economic recession has had significant adverse consequences on the Mexican economy, which in 2009 contracted by 6.5%, in
2010 grew by 5.5% and in 2011 grew by 3.9%, in terms of gross domestic production. Moreover, in the past, Mexico has experienced
prolonged periods of economic crises, caused by internal and external factors over which we have no control. Those periods have
been characterized by exchange rate instability, high inflation, high domestic interest rates, economic contraction, a reduction
of international capital flows, balance of payment deficits, a reduction of liquidity in the banking sector and high unemployment
rates. Decreases in the growth rate of the Mexican economy, or periods of negative growth, or increases in inflation may result
in lower demand for our products. We cannot assure you that economic conditions in Mexico will not worsen, or that those conditions
will not have an adverse effect on our financial performance.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Political, social and other developments in Mexico
could adversely affect our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Political, social and other developments
in Mexico may adversely affect our business. Additionally, the Mexican government has exercised, and continues to exercise, significant
influence over the economy. Accordingly, Mexican federal governmental actions and policies concerning the economy, the regulatory
framework, the social or political context, and state-owned and stated controlled entities or industries could have a significant
impact on private sector companies and on market conditions, prices and returns of Mexican securities. In the past, governmental
actions have involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations,
capital controls and limits on imports.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Currently, no single political party
has a majority in either chamber of the Mexican Congress. The absence of a clear majority and the lack of alignment between the
legislature and the administration could result in deadlock and prevent the timely implementation of political and economic reforms,
which in turn could have an adverse effect on Mexican economic policy. We cannot assure you that future political developments
in Mexico, over which we have no control, will not have an adverse effect on our business, financial condition or results of operations.
In July 2012, Mexico will face presidential elections which could lead to materially different government policies. We cannot assure
you that any new government policies will not adversely affect our business, financial condition and results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Violence in Mexico may adversely impact the Mexican
economy and have a negative effect on our financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexico has, in recent years, experienced
a significant increase in violence relating to illegal drug trafficking and other causes. This increase in violence could have
an adverse impact on economic activity in Mexico. We cannot assure you that the levels of violent crime in Mexico, over which we
have no control, will not have an adverse effect on the country&rsquo;s economy and, as a result, on our financial performance.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Epidemics, such as the outbreak of the H1N1 influenza,
may adversely impact the Mexican economy and our financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2009, the Mexican government declared
a state of emergency because of an outbreak of the H1N1 influenza, granting the government various powers to contain the epidemic.
The government cancelled nearly all public events from April 24 to May 5, 2009. Epidemics, such as the outbreak of the H1N1 influenza,
could significantly impact commercial activity as well as general economic conditions. In addition, our operations may be impacted
by a number of health-related factors, including, among other things, quarantines or closures of our facilities, which could severely
disrupt our operations, the sickness or death of our key officers and employees, and a general slowdown in the Mexican economy.
As a result, a new epidemic could have a materially adverse effect on our financial performance.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Depreciation of the Mexican peso relative to
the U.S. dollar could adversely affect our financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Depreciation of the Mexican peso relative
to the U.S. dollar decreases a portion of our revenues in U.S. dollar terms, as well as increases the cost of a portion of the
raw materials we require for production and any debt obligations denominated in U.S. dollars, and thereby may negatively affect
our results of operations. Since the second half of 2008, the value of the Mexican peso relative to the U.S. dollar has fluctuated
significantly. According to the U.S. Federal Reserve Board, during this period the exchange rate registered a low of Ps.9.91 to
U.S.$1.00 in August 5, 2008, and a high of Ps.15.38 to U.S.$1.00 in March 9, 2009. In 2011 the exchange rate registered a low of
Ps. 11.51 to U. S.$1.00 and a high of Ps. 14.25 to U.S.$1.00.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A severe depreciation of the Mexican
peso may also result in disruption of the international foreign exchange markets and may limit our ability to transfer to convert
Mexican pesos into U.S. dollars and other currencies. While the Mexican government does not currently restrict, and since 1982
has not restricted, the right or ability of Mexican or foreign persons or entities to convert Mexican pesos into U.S. dollars or
to transfer other currencies out of Mexico, the Mexican government could institute restrictive exchange rate policies in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Currency fluctuations or restrictions
on transfer of funds outside Mexico may have an adverse effect on our financial performance, and could adversely affect the U.S.
dollar value of the price of our Series B shares and the ADSs.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">High inflation rates in Mexico may affect demand
for our products and result in cost increases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexico has historically experienced high
annual rates of inflation. The annual rate of inflation, as measured by changes in the Mexican national consumer price index (<I>&Iacute;ndice
Nacional de Precios al Consumidor</I>) published by the Mexican Central Bank was 3.6% for 2009, 4.4% for 2010 and 3.8% for 2011.
High inflation rates could adversely affect our business and results of operations by reducing consumer purchasing power, thereby
adversely</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">affecting
demand for our products, increasing certain costs beyond levels that we could pass on to consumers, and by decreasing the benefit
to us of revenues earned if the inflation rate exceeds the growth in our pricing levels.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Developments in other countries could adversely
affect the Mexican economy, our financial performance and the price of our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican economy may, to varying degrees,
be affected by economic and market conditions in other countries. Although economic conditions in other countries may differ significantly
from economic conditions in Mexico, investors&rsquo; reactions to adverse developments in other countries may have an adverse effect
on the market value of securities of Mexican issuers. In recent years, for example, prices of both Mexican debt securities and
equity securities decreased substantially as a result of developments in Russia, Asia and Brazil. More recently, credit issues
in the United States related principally to the sale of sub-prime mortgages have resulted in significant fluctuations in global
financial markets, including Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, in recent years economic
conditions in Mexico have become increasingly correlated with economic conditions in the United States as a result of NAFTA, increased
economic activity between the two countries, and the remittance of funds from Mexican immigrants working in the United States to
Mexican residents. Therefore, adverse economic conditions in the United States, the termination of, or modifications to, NAFTA
or other related events could have a significant adverse effect on the Mexican economy. We cannot assure you that events in other
emerging market countries, in the United States or elsewhere will not adversely affect our financial performance.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our financial statements are prepared in accordance
with MFRS and therefore are not comparable to financial statements of other companies prepared under U.S. GAAP or other accounting
principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">All Mexican companies must prepare their
financial statements in accordance with MFRS which differs in certain significant respects from U.S. GAAP. Accordingly, Mexican
financial statements and reported earnings are likely to differ from those of companies in other countries in this and other respects.
See Note 24 to our consolidated financial statements included elsewhere herein for a description of certain principal differences
between MFRS and U.S. GAAP as they relate to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In March 2010, the Mexican National Banking
and Securities Commission (<I>Comisi&oacute;n Nacional Bancaria y de Valores, </I>or &ldquo;CNBV&rdquo;) required a work plan to
evaluate the incorporation of International Financial Reporting Standards (&ldquo;IFRS&rdquo;) into the financial reporting for
public companies in Mexico beginning in the first quarter of 2012. See &ldquo;Item 5 Operating and Financial Review and Prospects&rdquo;,
which summarizes the main differences that we have identified in the transition to IFRS and an estimate of any significant impacts
related thereto.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Mexico has different corporate disclosure and
accounting standards than those in the United States and other countries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A principal objective of the securities
laws of the United States, Mexico and other countries is to promote full and fair disclosure of all material corporate information.
However, there may be different or less publicly available information about issuers of securities in Mexico than is regularly
made available by public companies in countries with more highly developed capital markets, including the United States.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000"><A NAME="a_005"></A>Item</FONT></TD><TD><FONT STYLE="color: #010000">&nbsp;4.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Information
on the Company</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>History and Development of the Company</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are a diversified manufacturer, processor
and distributor of SBQ steel and structural steel products with production and commercial operations in the United States, Mexico
and Canada. We believe that in 2010 and 2011 we were an important producer of SBQ products in both the United States and Mexico,
in each case in terms of sales</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">volume.
We also believe that in 2010 and 2011 we were an important producer of structural and light structural steel products in Mexico
in terms of sales volume.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our SBQ products are used across a broad
range of highly engineered end-user applications, including axles, hubs and crankshafts for automobiles and light trucks, machine
tools and off-highway equipment. Our structural steel products are mainly used in the non-residential construction market and other
construction applications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We focus on the Mexican and U.S. specialty
steel markets by providing high value added products and services from our strategically located plants. The quality of our products
and services, together with cost benefits generated by our facility locations, has allowed us to develop long standing relationships
with many of our SBQ clients, which include Mexico and U.S.-based automotive and industrial equipment manufacturers and their suppliers.
In addition, our facilities located in the North West and Central parts of Mexico allow us to serve the structural steel and construction
markets in those regions and South West California with an advantage in the cost of freight over competitors which do not have
production facilities in such regions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our legal name is Grupo Simec, S.A.B.
de C.V. and our commercial name for advertising and publicity purposes is Simec. We are a <I>sociedad an&oacute;nima burs&aacute;til
de capital variable</I>, organized under the laws of Mexico. We are domiciled in the city of Guadalajara, Jalisco, and our principal
administrative office is located at Calzada L&aacute;zaro C&aacute;rdenas 601, Guadalajara, Jalisco, Mexico 44440. Our telephone
number is 011-52-33-3770-6700.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our History</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our steel operations commenced in 1969
when a group of families from Guadalajara, Jalisco, formed Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara, S.A. de C.V.
(&ldquo;CSG&rdquo;), a mini-mill steel company. In 1980, Grupo Sidek, S.A. de C.V. (&ldquo;Sidek&rdquo;), our former parent company,
was incorporated and became the holding company of CSG. In 1990, Sidek consolidated its steel and aluminum operations into a separate
subsidiary, Grupo Simec, S.A. de C.V., a Mexican corporation with limited liability, organized under the laws of Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In March 2001, Sidek consummated the
sale of its entire approximate 62% controlling interest in our company to Industrias CH. In June 2001, Industrias CH increased
its interest in us to 82.5% by acquiring additional shares from certain of our bank creditors that had converted approximately
U.S.$95.4 million of our debt (U.S.$90.2 million of principal and U.S.$5.2 million of interest) into our common shares. Industrias
CH subsequently increased its equity position in, us through various conversions of debt to equity and capital contributions, to
an 84% interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In August 2004, we acquired the property,
plant and equipment and the inventories, and assumed liabilities associated with the seniority premiums of employees, of the Mexican
steel-making facilities of Industrias Ferricas del Norte S.A. (Corporacion Sidenor of Spain, or &ldquo;Grupo Sidenor&rdquo;) located
in Apizaco, Tlaxcala and Cholula, Puebla. We refer to this acquisition as the &ldquo;Atlax Acquisition.&rdquo; Our total net investment
in this transaction was approximately U.S.$122 million (excluding value added tax of approximately U.S.$16 million paid in 2004
and recouped from the Mexican government in 2005), funded with cash from operations, and a U.S.$19 million capital contribution
from Industrias CH.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In July 2005, we and Industrias CH acquired
100% of the capital stock of Republic, a U.S. producer of SBQ steel. We acquired 50.2% of Republic&rsquo;s stock through our majority
owned subsidiary, SimRep, and Industrias CH purchased the remaining 49.8% through SimRep. We financed our portion of the U.S.$245
million purchase price principally through a loan we received from Industrias CH that we have repaid in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On October 9, 2006 we sold our share
ownership in Administradora de Cartera de Occidente, S.A. de C.V. (&ldquo;ACOSA&rdquo;). ACOSA engages in the recovery of non-performing
loans acquired pursuant to a public bidding process conducted by the Instituto de Protecci&oacute;n al Ahorro Bancario in Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 24, 2007 we purchased 99.95%
of the shares of three subsidiaries of Grupo TMM S.A de C.V. These three subsidiaries were TMM Am&eacute;rica, S.A. de C.V., TMM
Continental, S.A. de C.V. and Mutimodal Dom&eacute;stica, S.A. de C.V. Following the purchase, these companies have engaged in
marketing steel. In February</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">2008, the
names of these three companies were changed to CSG Comercial, S.A. de C.V., Comercializadora de Productos de Acero de Tlaxcala,
S.A. de C.V. and Sider&uacute;rgica de Baja California, S.A. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2007, the board of directors of CSG
decided to spin-off CSG. CSG conveyed 87.4% of its stockholders equity to Tenedora CSG, S.A. de C.V, as the spun-off company. This
corporate restructuring did not have a material effect on our consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 30, 2008, we acquired all the
capital stock of Aceros DM and certain affiliated companies (&ldquo;Grupo San&rdquo;) for a total cost of approximately Ps. 8,730
million (U.S.$844 million). Grupo San is a long products steel mini-mill and the second-largest corrugated rebar producer in Mexico.
Grupo San&rsquo;s operations are based in San Luis Potos&iacute;, Mexico. Its plants and 1,450 employees produce 700 thousand tons
of finished products annually.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On July 29, 2008, the company acquired
100% of the shares of Aroproc, S. A. de C. V., Del-Ucral, S. A. de C. V., Qwer, S. A. de C. V. and Transporte Integral Dom&eacute;stico,
S.A. de C.V., subsidiaries of Grupo TMM, S. A. de C. V., to convert them into the operating manager of the iron and steel plants
located in Mexico. On July 30 2008, these companies were renamed to Promotora de Aceros San Luis, S. A. de C. V., Comercializadora
Aceros DM, S.A. de C.V., Comercializadora Msan, S.A. de C.V. and Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V. respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 26, 2008, the company acquired
99.95% of the shares of Northarc Express, S. A. de C. V., a subsidiary corporation of Grupo TMM, S. A. de C. V., to convert this
company into the operating manager of iron and steel plants located in Mexico. On January 6, 2009, this company changed its name
to Simec International 2, S. A. de C. V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On February 5, 2009, Simec International
2, S.A. de C.V. divested assets and liabilities to three new wholly owned Mexican subsidiaries. As a consequence of such reorganization,
Simec International 3, S.A. de C.V. now operates the Tlaxcala and Puebla facilities, Simec International 4, S.A. de C.V. and Simec
International 5, S.A. de C.V jointly operate the San Luis de Potos&iacute; facilities, and Simec International 2, S.A. de C.V.
kept the operation of the Guadalajara and Mexicali facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2009 we incorporated two new wholly
owned subsidiaries. Simec Acero, S.A. de C.V. distributes all Grupo Simec products in Mexico and Simec USA, Corp. is in charge
of distribution of our products outside of Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 12, 2009, we incorporated Pacific
Steel Projects, Inc., a wholly owned subsidiary organized under the laws of the State of California whose purpose is to develop
technology improvement projects for our Mexican facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On August 10, 2009, Simec International,
S.A. de C.V. divested assets and liabilities to four new wholly owned Mexican subsidiaries named Siminsa A, S.A. de C.V., Siminsa
B, S.A. de C.V., Siminsa C, S.A. de C.V. and Siminsa D, S.A. de C.V. After the divesture, Siminsa A was merged into Simec International
2, Siminsa B was merged into Simec International 3, Siminsa C was merged into Simec International 4 and Siminsa D was merged into
Simec International 5.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 10, 2009, Simec International
2, Simec International 3, Simec International 4 and Simec International 5 divested assets and liabilities to Simec Steel, Inc.,
a new wholly owned subsidiary organized under the laws of the State of California whose purpose is to provide financing to the
Mexican companies of the group and to seek new investment opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 31, 2010 Arrendadora Simec, S.
A. de C. V. divested assets, liabilities and equity to our subsidiary Corporacion ASL, S. A. de C. V. which assumed the operation
of Arrendadora Simec, S. A. de C. V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On June 28, 2010, our subsidiary Simec
International 6, S. A. de C. V., whose purpose is to produce steel, was constituted. Simec International 6, S. A. de C. V. begun
operations in November of 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On June 30, 2010, Simec International,
S. A. de C. V., divested assets and equity to our subsidiary Simec International 7, S. A. de C. V. Among the assets transferred
the shares of Aceros DM were included.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On September 3, 2010 we formed a Brazilian
entity denominated GV do Brazil Ind&uacute;stria e Com&eacute;rcio de A&ccedil;o Ltda. On august 5, 2011 we acquired 1,300,000
square meters of land on Pindamonhangaba, S&atilde;o Paulo State, Brazil, and paid U.S.$8 million for the construction of a new
steel facility, which is estimated to become operational in the third quarter of 2013. The total budget for the project will be
U.S.$236 million, with U.S.$171 million paid by us and U.S.$65 million provided as foreign investment incentives granted by the
Brazilian Government. The facility will have a production capacity of 520,000 tons of billet and 400,000 tons of finished goods
of rebar and wire, and will have 800 employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On October 21, 2010 in the Extraordinary
Shareholders Meeting of Arrendadora Simec S.A. de C.V. the dissolution of the company was approved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 2, 2010, we acquired 100%
of the shares of Lipa Capital, LLC. The total cost of this acquisition was of Ps. 187 million (U.S.$15.2 million). On December
9, 2010, Lipa Capital, LLC merged to Simec International 6, S. A. de C. V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On February 3, 2011 the company, through
two of its wholly owned subsidiaries (Solon Wire Processing LLC, and the newly formed Republic Memphis LLC) acquired certain plants,
machinery and equipment from BCS Industries LLC and affiliates (&ldquo;Bluff City Steel&rdquo;), which was a customer and vendor
of the company. For these assets the company paid U.S.$2.5 million in cash and forgave approximately U.S.$6 million due by Bluff
City Steel to the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 2, 2011 in Extraordinary Shareholders
Meetings of Acero Transportes S.A. de C.V. and Acero Transportes San S.A. de C.V. (subsidiaries of Grupo San), authorized the merger
two subsidiaries, whereby Acero Transportes S.A. de C.V. was merged into Acero Transportes San S.A. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 20 and October 3, 2011 in Extraordinary
Shareholders Meetings, Simec International 2, S.A. de C.V., Simec International 3 S.A. de C.V., Simec International 4 S.A. de C.V.
and Simec International 5 S.A. de C.V., changed their address and tax authority to report to the State of California, USA, transforming
them into incorporated companies in accordance with the laws and regulations of the State of California, USA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 31, 2011 we sold our shares in
Arrendadora del Norte de Matamoros S.A. de C.V. to Perfiles Comerciales Sigosa, S.A. de C.V. (subsidiary of ICH) for Ps. 42.5 million,
paid in cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On September 1, 2011 in their respective
Extraordinary Shareholders Meetings, Procesadora Industrial San S.A. de C.V. and Malla San S.A. de C.V. (subsidiaries of Grupo
San) authorized the merger of Procesadora Industrial San S.A. de C.V. into Mall San S.A. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 2011, the company entered
into an agreement with an unrelated third-party &ldquo;purchaser&rdquo; for the factoring of specific accounts receivable of the
company in order to increase the company&rsquo;s working capital required to fund such receivables. The agreement has an initial
term of one year and is automatically extended for additional periods of one year each unless either party provides written notice
of cancellation. On the sale date, the purchaser advances funds to the company equivalent to 80% of the value of the company&rsquo;s
receivables. The maximum amount of outstanding advances related to the assigned receivables is U.S.$30 million. Proceeds on the
transfer reflect the face value of the account less a discount. The remaining amount between the receivable balance and the advance
is held in reserve by the purchaser. Payment of the funds held in reserve less a discount fee are made by the purchaser within
four days of receipt of payment on collection of funds related to each assigned receivable. The discount fee, which generally ranges
from 1% if paid within 30 days (of the advance date) to 3.75% if paid within 90 days, is recorded as a charge to interest expense
in the income of the period of the sale. The purchaser shall have no recourse against the company if payments are not received
due to insolvency of an account debtor within 120 days of the invoice date. However, while the transaction calls for the sale,
assignment, transfer and conveyance from the company to the purchaser of all rights, title and interests in the selected accounts
receivable, the purchaser may return and redeem the purchase price of any receivable not paid to the purchaser</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">within
90 days of purchase for any reason other than insolvency of the account debtor. As collateral for the repayment of advances for
receivables sold, the purchaser has a priority security interest in all accounts receivable of the company (as defined by the
Uniform Commercial Code of the USA). For the year ended December 31, 2011, the company sold a face amount of U.S.$11.0 million
of accounts receivables to the purchaser. Discount fees incurred by the company pursuant to this agreement were approximately
U.S.$0.2 million for the year ended December 31, 2011. There was US$ 0.9 million of accounts receivable that had been factored
but which had not been collected by the purchaser at December 31, 2011, and therefore was subject to charge-back to the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 30, 2011 Simec International
7, S.A. de C.V. sold to Corporaci&oacute;n ASL S.A. de C.V. all of its shares in Corporaci&oacute;n Aceros DM, S.A de C.V., comprising
of a total of 627,305,446 shares (99.9% of the common stock) for a value of Ps. 3,200 million, comprised of a down payment of Ps.
63 million and the remaining of Ps. 3,137 million due on April 30, 2012. This transaction generated a tax loss of Ps.7,860 million
which amount under Mexican Tax Law (<I>Ley de Impuesto Sobre la Renta</I>), may be deducted against future gains related to dispositions
of securities. On January 30, 2012 Simec International 7, S.A. de C.V. filed a demand challenging the current law, which limits
the deduction of this net loss related to shares sales.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Principal Capital Expenditures</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We continually seek to improve our operating
efficiency and increase sales of our products through capital investments in new equipment and technology. These capital expenditures
are financed primarily with funds that we segregate monthly from the results of operations generated by each facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We currently estimate capital expenditures
for the year 2012 will be approximately Ps. 2,313 million (U.S.$165.3 million), consisting of Ps. 747.4 million (U.S.$53.4 million)
of estimated capital expenditures in our Republic facilities, Ps. 306.5 million (U.S.$21.9 million) of capital expenditures in
our facilities in Mexico and Ps. 1,259.1 (U.S.$90 million) for the construction of a new steel facility in Brazil. Nevertheless,
this estimate is subject to certain uncertainties and actual capital expenditures in 2012 may differ significantly from such estimate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011, we spent Ps. 164.3 million (U.S.$13.1
million) on capital investments for Republic&rsquo;s facilities, including Ps. 9 million (U.S.$0.7 million) at the Lorain, Ohio
facility, Ps. 11.8 million (U.S.$0.9 million) at the Lackawanna, New York facility, Ps. 16.5 million (U.S.$1.3 million) at the
Canton, Ohio facility, Ps. 0.7 million (U.S.$0.05 million) at the Massillon, Ohio facility, Ps. 19.4 million (U.S.1.6 million)
at our corporate location in Ohio, Ps. 0.5 million (U.S.$.05 million) at the Gary, Indiana facility, Ps. 104.1 million (U.S.8.3
million) at the Solon, Ohio and Memphis, Tennessee facilities in connection with the acquisition of the fixed assets of Bluf City
Steel, as described in Note 3(a) and Note 25 of our consolidated financial statements, and Ps. 2.3 million (U.S.$0.2 million) at
the Hamilton, Ontario, Canada facility. We spent Ps. 146.6 million (U.S.$11.7 million) on capital improvements at our facilities
in Mexico, including Ps. 74.2 million (U.S.$5.9 million) at the Apizaco facility, Ps. 2.3 million (U.S.$0.2 million) at the Mexicali
facility, Ps. 18.5 million (U.S.$1.5 million) at the Guadalajara facility, and Ps. 51.6 million (U.S.$4.1 million) at the San Luis
facilities. We also spent Ps. 121.1 million (U.S.$9.7 million) in the acquisition of 1,300,000 square meters of land and other
investments for the construction of a new steel facility on Pindamonhangaba, Sao Paulo State, Brazil, which facility is in the
process of construction and is estimated to become operational in August 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2010, we spent Ps. 60 million (U.S.$4.9
million) on capital investments for Republic&rsquo;s facilities, including Ps. 5 million (U.S.$0.4 million) at the Lorain, Ohio
facility, Ps. 41 million (U.S.$3.4 million) at the Lackawanna, New York facility, Ps. 10 million (U.S.$0.8 million) at the Canton,
Ohio facility, Ps. 1 million (U.S.$0.1 million) at the Massillon, Ohio facility and Ps. 3 million (U.S.$0.2 million) at the Hamilton,
Ontario, Canada facility. We also spent Ps. 436 million (U.S.$35.3 million) on capital improvements at our facilities in Mexico,
including Ps. 197 million (U.S.$15.9 million) at the Apizaco facility, Ps. 2 million (U.S.$0.2 million) at the Mexicali facility,
Ps. 8 million (U.S.$0.6 million) at the Guadalajara facility, and Ps. 229 million (U.S.$18.6 million) at the San Luis facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2009, we spent Ps. 84 million (U.S.$6.4
million) on capital investments for Republic&rsquo;s facilities, including Ps. 7 million (U.S.$0.5 million) at the Lorain, Ohio
facility, Ps. 74 million (U.S.$5.7 million) at the Lackawanna, New York facility, and Ps. 3 million (U.S.$0.2 million) at the Hamilton,
Ontario, Canada facility. We also spent Ps. 179 million (U.S.$13.7 million) on capital improvements at our facilities in Mexico,
including Ps. 77</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">million
(U.S.$5.8 million) at the Apizaco facility, Ps. 4 million (U.S.$0.3 million) at the Mexicali facility, Ps. 21 million (U.S.$1.6
million) at the Guadalajara facility, and Ps. 78 million (U.S.$6 million) at the San Luis facilities.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Business Overview</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In the United States and Mexico, we own
and operate fourteen state-of-the-art steel making, processing and/or finishing facilities with a combined annual crude steel installed
production capacity of 4.8 million tons and a combined annual installed rolling capacity of 3.7 million tons. We operate both mini-mill
and integrated steel making facilities, which give us the flexibility to optimize our production and reduce production costs based
on the relative prices of raw materials (e.g., scrap for mini-mills and iron ore for blast furnace).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We currently own and operate:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.50in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a mini-mill in Guadalajara, Jalisco;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a mini-mill in Mexicali, Baja California Norte;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a mini-mill in Apizaco, Tlaxcala;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a cold finishing facility in Cholula, Puebla;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>two mini-mills in San Luis Potos&iacute;, San Luis Potos&iacute;, Mexico and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a mini mill in Canton, Ohio, an integrated facility in Lorain, Ohio and value-added rolling and finishing facilities in Lorain
and Massillon, Ohio; Lackawanna, New York; Gary, Indiana; Memphis, Tennessee, Solon, Ohio and Hamilton, Ontario, all of which we
own through our majority-owned subsidiary, Republic.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011, we had net sales of Ps. 29.3
billion, gross profit of Ps. 3.6 billion and net income of Ps. 2.9 billion. In 2011, approximately 49.5% of our consolidated sales
were in the United States and Canada, approximately 49.2% were in Mexico, and approximately 1.3% were exports to other markets
outside North America.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Business Strategy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We seek to further consolidate our position
as a leading producer, processor and distributor of SBQ steel in North America and structural steel in Mexico. We also seek to
expand our presence in the steel industry by identifying and pursuing growth opportunities and value enhancing initiatives. Our
strategy includes:</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Improving our cost structure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are continuing working to reduce our
operating cost and non-operating expenses and plan to continue to do so by reducing overhead expenses and operating costs through
sharing best practices among our operating facilities and maintaining a conservative capital structure.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Focusing on high margin and value-added products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We prioritize the production of high
margin steel products over volume and utilization levels. We plan to continue to base our production decisions on achieving relatively
high margins.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Building on our strong customer relationships.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We intend to strengthen our long-standing
customer relationships by maintaining strong customer service and proactively responding to changing customer needs.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Pursuing strategic growth opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have successfully grown our business
by acquiring, integrating and improving under-performing operations. In addition, we intend to continue to pursue acquisition opportunities
that will allow for disciplined growth of our business and value creation for our shareholders. We also intend to pursue organic
growth by reinvesting the cash generated by our operating activities to expand the capacity and increase the efficiency of our
existing facilities.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our Products</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We produce a wide range of value-added
SBQ steel, long steel and medium-sized structural steel products. In our Mexican facilities, we produce I-beams, channels, structural
and commercial angles, hot rolled bars (round, square and hexagonals), flat bars, rebars, cold finished bars and wire rods. In
our U.S. facilities, we produce hot rolled bars, cold finished bars, semi-finished tube rounds and other semi-finished trade products.
The following is a description of these products and their main uses:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>I-beams</I>. I-beams, also known as standard beams, are &ldquo;I&rdquo; form steel structural sections with two equal parallel
sides joined together by the center with a transversal section, forming 90&ordm; angles. We produce I-beams in our Mexican facilities
and they are mainly used by the industrial construction sector as structure supports.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Channels</I>. Channels, also known as U-Beams because of their &ldquo;U&rdquo; form, are steel structural sections with
two equal parallel sides joined together by its ends with a transversal section, forming 90&ordm; angles. We produce channels in
our Mexican facilities and they are mainly used by industrial construction sector as structure supports and for stocking systems.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Angles</I>. Angles are two equal sided sections joined by their ends with a 90&ordm; angle, in an &ldquo;L&rdquo; form.
We produce angles in our Mexican facilities and they are used mainly by the construction and furniture industries as joist structures
and framing systems.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Hot rolled bars</I>. Hot rolled bars are round, square and hexagonal steel bars that can be made of special or commodity
steel. The construction, auto part and furniture industries mainly use the round and square bars. The hexagonal bars are made of
special steel and are mainly used by the hand tool industry. We produce the steel sections in our Mexican and U.S. facilities.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Flat bars</I>. Flat bars are rectangular steel sections that can be made of special or commodity steel. We produce flat
bars at our Mexican facilities. The auto part industry mainly uses special steel as springs, and the construction industry uses
the commodity steel flat bars as supports.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Rebar</I>. Rebar is reinforced, corrugated round steel bars with sections from 0.375 to 1.5 inches in diameter, and we produced
rebar our Mexican facilities. Rebar is only used by the construction industry to reinforce concrete. Rebar is considered a commodity
product due to its general acceptance by most consumers of industry standard specifications.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Cold-finished bars</I>. Cold-finished bars are round and hexagonal SBQ steel bars transformed through a diameter reduction
process. This process consists of (1) reducing the cross sectional area of a bar by drawing the material through a die without
any pre-heating or (2) turning or &ldquo;peeling&rdquo; the surface of the bar. The process changes the mechanical properties of
the steel, and the finished product is accurate to size, free from scale with a bright surface finish. We produce these bars in
our Mexican, U.S. and Canadian facilities, and mainly the auto part industry uses them.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Semi-finished tube rounds</I>. These are wide round bars used as raw material for the production of seamless pipe. The semi-finished
tube rounds are made of SBQ steel, and we produce them in our U.S. facilities. Seamless pipe manufacturers use them to produce
pipes used in the oil extraction and construction industries.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth, for the
periods indicated, our sales volume for basic steel products.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Steel Product Sales Volume</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center">(thousands of tons)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%">I-Beams</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">76.8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">70.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">72.8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Channels</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62.1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Angles (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">168.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">167.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">159.3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Hot-rolled bars (round, square and hexagonal rods)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">724.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">926.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">954.5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Flat bar</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">91.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">101.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Rebar</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">590.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">533.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">536.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Cold finished bars</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">181.2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Semi-finished tube rounds</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Other semi-finished trade products (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72.9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Electro-Welded wire mesh</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22.1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Wire rod</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37.7</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Electro-Welded wire mesh panel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34.5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">Other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">58.8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">40.8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">54.2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total steel sales</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,040.0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,241.1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,288.7</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 5.5in 1pt 0in"><DIV STYLE="font-size: 1pt; border-top: Black 0.5pt solid; width: 100%; margin-top: 6">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Includes structural angles and commercial angles.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Includes billets and blooms (wide section square and round bars).</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Sales and Distribution</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We sell and distribute our steel products
throughout North America. We also export steel products from Mexico to Central and South America and Europe. In 2011, approximately
51.5% of our steel product sales represented SBQ steel products, of which we sold 36% to the auto part industry, 24% to service
centers, 3% for hand tools, 5% for mining equipment and the remaining 32% to other industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2010, direct sales to the automotive
industry increased by 40% as compared to 2009. In 2011, direct sales to the automotive industry decreased by 7% as compared to
2010. The collapse of the energy market had the largest impact on our business as the energy market accounted for 22% of our sales
of SBQ steel products in 2008 and less than 1% in 2009 as sales dropped by U.S.$350 million to US Steel alone. In 2010, we did
not record any sales to this sector and in 2011 sales to the energy sector accounted 0.4% of our sales of SBQ steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth, for the
periods indicated, our Mexico, U.S. and Canada product sales as a percentage of our total product sales.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Steel Product Sales By Region</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States and Canada</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%">I-Beams</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">97</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">95</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">97</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">3</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">5</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Channels</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">59</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Angles</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">76</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Hot-rolled bars (round, square <BR>
&nbsp;&nbsp;&nbsp;and </TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">68</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States and Canada</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;hexagonal rods)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%">Rebar</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">98</TD><TD STYLE="text-align: left; width: 1%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">96</TD><TD STYLE="text-align: left; width: 1%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">97</TD><TD STYLE="text-align: left; width: 1%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">2</TD><TD STYLE="text-align: left; width: 1%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">4</TD><TD STYLE="text-align: left; width: 1%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 6%">3</TD><TD STYLE="text-align: left; width: 1%">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Flat bar</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">77</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Cold drawn finished bars</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">76</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Semi-finished tube rounds</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Other semi-finished trade products</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Electro-Welded wire mesh</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Wire rod</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Electro-Welded wire mesh panel</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">Other</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">59</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">41</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">88</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 2.5pt">Total (weighted average)</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">63</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">55</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">56</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">45</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">44</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 7pt">&nbsp;</TD>
    <TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt">&nbsp;</TD>
    <TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt">&nbsp;</TD>
    <TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt">&nbsp;</TD>
    <TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt">&nbsp;</TD>
    <TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt">&nbsp;</TD>
    <TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 7pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in">During 2011, approximately 38% of our sales
by volume came from the U.S. market, with almost 100% of such sales representing SBQ products. The Mexican market represents approximately
62% of our sales by volume, with SBQ products representing approximately 21% of such sales and the remainder representing commercial
steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Approximately 60% of our sales in the
United States and Canadian markets come from contractual long-term agreements that establish minimum quantities and prices, which
are adjustable based on fluctuations of prices of key production materials. The remainder of our sales in the United States and
Canadian markets are spot sales either directly to end customers through our sales force or through independent distributors. We
sell to customers in the United States and Canadian markets through a staff of professional sales representatives and sales technicians
located in the major manufacturing centers of the Midwest, Great Lakes and Southeast regions of the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We sell to the Mexican market through
a group of approximately 100 independent distributors, who also carry other steel companies&rsquo; product lines, and through our
wholly-owned distribution center in Guadalajara. Our sales force and distribution center are an important source of information
concerning customer needs and market developments. By working through our distributors, we believe that we have established and
can maintain market leadership with small-and mid-market end-users throughout Mexico. We believe that our domestic customers are
highly service-conscious.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We distribute our exports outside North
America primarily through independent distributors who also carry other product lines. In addition, we have three full-time employees
in Mexico dedicated exclusively to exports.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">During 2011 and 2010, we received orders
for our products in our Mexican facilities on average approximately two weeks before producing those products. We generally fill
orders for our U.S. and Canadian SBQ steel products within one to 12 weeks of the order depending on the product, customer needs
and other production requirements. Customer orders are generally cancelable without penalty prior to finishing size rolling and
depending on customers&rsquo; changing production schedules. Accordingly, we do not believe that backlog is a significant factor
in</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">our business.
A substantial portion of our production is ordered by our customers prior to production. We cannot assure you that significant
levels of preproduction sales orders will continue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In our Republic plants, we have long
term relationships with most of our major customers, in some cases for 10 to 20 years or longer. Our major direct and indirect
customers include: leading automotive and industrial equipment manufacturers General Motors Corporation, Ford Motor Company, Chrysler
LLC, Honda of America MFG, Inc. and Caterpillar Inc.; first tier suppliers to automotive and industrial equipment manufacturers
such as American Axle &amp; Manufacturing Holdings, Inc., ArvinMeritor, Inc., NTN Driveshaft, Inc., TRW Automotive Holdings Corp.
and Hephaesus Holding Inc.; service centers which include AM Castle &amp; Co., Earle M. Jorgensen Co., Thyssen Krupp Gerlach Company
and Eaton Steel Bar Company; and tubular product manufacturer, U.S. Steel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our U.S. and Canadian facilities are
strategically located to serve the majority of consumers of SBQ products in the United States. Our U.S. and Canadian facilities
ship products between their mills and finished products to customers by rail and truck. Customer needs and location determine the
type of transportation used for deliveries. The proximity of our rolling mills and cold finishing plants to our U.S. customers
allows us to provide competitive rail and truck freight rates and flexible deliveries in order to satisfy just-in-time and other
customer manufacturing requirements. We believe that the ability to meet the product delivery requirements of our customers in
a timely and flexible fashion is a key to attracting and retaining customers as more SBQ product consumers reduce their in-plant
raw material inventory. We optimize freight costs by using our significantly greater scale of operations to maintain favorable
transportation arrangements, continuing to combine orders in shipments whenever possible and &ldquo;backhauling&rdquo; scrap and
other raw materials.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Competition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Competition in the steel industry is
significant. Competition in the steel industry exerts a downward pressure on prices, and, due to high start-up costs, the economics
of operating a steel mill on a continuous basis may encourage mill operators to establish and maintain high levels of output even
in times of low demand, which further decreases prices and profit margins. The recent trend of consolidation in the global steel
industry may further increase competitive pressures on independent producers of our size, particularly if large steel producers
formed through consolidations, which have access to greater resources than us, adopt predatory pricing strategies that decrease
prices and profit margins. If we are unable to remain competitive with these producers, our profitability and market share would
likely be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A number of our competitors in the United
States, Canada and Mexico have undertaken modernization and expansion plans, including the installation of production facilities
and manufacturing capacity for certain products that compete with our products. As these producers become more efficient, we will
face increased competition from them and may experience a loss of market share. In each of Mexico, the United States and Canada
we also face competition from international steel producers. Increased international competition, especially when combined with
excess production capacity, would likely force us to lower our prices or to offer increased services at a higher cost to us, which
could materially reduce our profit margins.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Mexico</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We compete in the Mexican domestic market
and in its export markets for non-flat steel products primarily on the basis of price and product quality. In addition, we compete
in the domestic market based upon our responsiveness to customer delivery requirements. The flexibility of our production facilities
allows us to respond quickly to the demand for our products. We also believe that the geographic locations of our various facilities
throughout Mexico and variety of products help us to maintain our competitive market position in Mexico and in the southwestern
United States. We believe that our Mexicali mini-mill, one of the closest mini-mills to the southern California market, is competitive
in terms of production and transportation costs in northwestern Mexico and southern California.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe that our competitors&rsquo;
closest plants to the southern California market are: Nucor Steel, located in Plymouth, Utah; Schnitzer Steel (Cascade), located
in McMinnville, Oregon; Oregon Steel (Rocky Mountain Steel Mills), located in Pueblo, Colorado; Tamco Steel, located in Rancho
Cucamonga, California; and Grupo</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">Villacero
(Border Steel), located in El Paso, Texas. We believe that we have an advantage over certain competitors due to the labor cost
in our Mexican operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe that in 2011 we were the sole
Mexican producer of 5 inch, 6 inch and 200 mm I-beams, and that during such period there was one other producer of 4-inch I-beams.
These products accounted for approximately 69,600 tons, or approximately 3%, and approximately 72,356 tons, or approximately 3.2%,
of our total finished product sales in 2011 and 2010, respectively. The revenue that we derived from I-beam products represented
approximately 3.3% and 3.1% of our net sales in 2010 and 2011, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011, we sold approximately 196,946
tons of I-beams, channels and angles at least three inches in width (including the 69,600 tons of I-beams described above) which
represented approximately 9% of our total finished product sales for the year. In 2010, we sold approximately 199,805 tons of I-beams,
channels and angles at least three inches in width (including the 72,356 tons of I-beams described above) which represented approximately
9% of our total finished product sales for the year. We believe that the domestic competitors in the Mexican market for structural
steel are Altos Hornos de Mexico, S.A. de C.V. (&ldquo;Ahmsa&rdquo;), Sider&uacute;rgica del Golfo, S.A. de C.V. (a wholly-owned
subsidiary of Industrias CH), Aceros Corsa, S.A. de C.V. (&ldquo;Corsa&rdquo;) and Gerd&atilde;o, S.A. We estimate that our share
of Mexican production of structural steel was 53% in 2011 and 59% in 2010, according with information provided by CANACERO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011, we sold approximately 1,133,574
tons of hot rolled and cold finished steel bars. Our other major product lines are rebar and light structural steel (angles less
than three inches in width and flat bar), for which our share of domestic production was 16% and 53%, respectively, in 2011. In
2010, we sold approximately 1,091,759 tons of hot rolled and cold finished steel bars. Our other major product lines are rebar
and light structural steel (angles less than three inches in width and flat bar), for which our share of domestic production was
17% and 62%, respectively, in 2010. Rebar and light structural steel together accounted for approximately 743,243 tons, or 32%,
of our total production of finished steel products in Mexico and the United States in 2011. Rebar and light structural steel together
accounted for approximately 731,486 tons, or 33%, of our total production of finished steel products in Mexico and the United States
in 2010. We compete in the Mexican market with a number of producers of these products, including Ahmsa, Hylsamex, S.A. de C.V.,
Sicartsa, S.A. de C.V., Corsa, Aceros Tultitl&aacute;n, S.A. de C.V., Commercial Metals Inc., Belgo Mineira Aceralia Perfiles Bergara,
S.A., Chaparral Steel Company, Deacero, S.A. de C.V., Talleres y Acero, Nucor Corporation and Bayou Steel Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe that we have been able to
maintain our domestic market share and profitable pricing levels in Mexico in part because the central Mexico sites of the Guadalajara,
Apizaco, Cholula and San Luis facilities afford us cost advantages relative to certain U.S. producers when shipping to customers
in central and southern Mexico, and our flexible production facility has given us the ability to ship specialty products in relatively
small quantities with short lead times. The Mexicali mini-mill has helped to increase sales in northwestern Mexico and the southwestern
United States because its proximity to these areas reduces our freight costs.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">United States and Canada</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In the United States and Canada, we compete
primarily with both domestic SBQ steel producers and importers. Our U.S. domestic competition for hot-rolled engineered bar products
is both large U.S. domestic steelmakers and specialized mini-mills. Non-U.S. competition may impact segments of the SBQ market,
particularly where certifications are not required, and during periods when the U.S. dollar is strong as compared with foreign
currencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The principal areas of competition in
our markets are product quality and range, delivery reliability, service and price. Special chemistry and precise processing requirements
characterize SBQ steel products. Maintaining high standards of product quality, while keeping production costs low, is essential
to our ability to compete in our markets. The ability of a manufacturer to respond quickly to customer orders currently is, and
is expected to remain, important as customers continue to reduce their in-plant raw material inventory.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe our principal competitors
in the United States market, depending on the product, include Nucor Corporation, Niagara LaSalle, Arcelor Mittal, Charter Steel,
Steel Dynamics, Inc., The Timken Company and Gerdau Macsteel.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Certifications</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">ISO is a worldwide federation of national
standards bodies which have united to develop internationally accepted standards so that customers and manufacturers have a system
in place to provide a product of known quality and standards. The standards set by ISO cover every facet of quality from management
responsibility to service and delivery. We believe that adhering to the stringent ISO procedures not only creates efficiency in
manufacturing operations, but also positions us to meet the strict standards that our customers require. We are engaged in a total
quality program designed to improve customer service, overall personnel qualifications and team work. The facilities at Apizaco
and Cholula have received ISO 9001:2000 certification from International Quality Certifications covering the period January 19,
2007 to July 18, 2010. This certification was renewed in January 2010 and will expire on March 11, 2013. We are in the process
of obtaining the ISO/TS 16949 certification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our U.S. operations are currently ISO/TS
16949:2009 certified. The ISO/TS 16949:2009 standard, developed by the International Automotive Task Force, is the result of the
harmonization of the supplier quality requirements of vehicle manufacturers worldwide and provides for a single quality management
system of continuous improvement, defect prevention and reduction of variation and waste in the supply chain. It places greater
emphasis on management&rsquo;s commitment to quality and customer focus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our Republic facilities are currently
ISO 14001 and OHSAS 18001 certified. Through these certifications, Republic&rsquo;s Environmental, Health &amp; Safety Management
System is structured upon training, communication, employee participation, document control, objective and target setting, and
management&rsquo;s periodic reviews to implement our commitments to environmental protection and providing a safe and clean workplace.
Most of the automotive customers of our Republic facilities require ISO 14001 certification, however, OHSAS 18001 is voluntary.
The current ISO 14001 certification is effective until November 2013. The initial OHSAS 18001 certification was effective through
February 2012; we are awaiting the formal renewal, which once received will continue through February 2015.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Raw Materials</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Prices for raw materials necessary for
production of our steel products have fluctuated significantly in the past and significant increases in raw material prices could
adversely affect our profit margins. During periods when prices for scrap metal, iron ore, ferroalloys, coke and other raw materials
have increased, our industry has historically sought to maintain profit margins by passing along increased raw materials costs
to customers by means of price increases. For example, prices of scrap metal decreased approximately 24% in 2009, increased approximately
34% in 2010 and increased approximately 21% in 2011; and prices of ferroalloys decreased approximately 43% in 2009, increased approximately
22% in 2010 and increased approximately 10% in 2011. We may not be able to pass along these and other cost increases in the future
and, therefore, our profitability may be materially and adversely affected. Even when we can successfully increase our prices,
interim reductions in profit margins frequently occur due to a time lag between the increase in raw material prices and the market
acceptance of higher selling prices for finished steel products. We cannot assure you that our customers will agree to pay increased
prices for our steel products that compensate us for increases in our raw material costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We purchase our raw material requirements
either in the open market or from certain key suppliers. We cannot assure you that we will be able to continue to find suppliers
of these raw materials in the open market, that the prices of these materials will not increase or that the quality will remain
the same. In addition, if any of our key suppliers fails to deliver or we fail to renew our supply contracts, we could face limited
access to some raw materials, or higher costs and delays resulting from the need to obtain our raw materials requirements from
other suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011, our cost of sales in Mexico,
as a percentage of sales in Mexico, was 80%, compared to our U.S. operations where our cost of sales, as a percentage of sales
in the United States, was 96%, and our consolidated cost of sales, as a percentage of consolidated sales, was 88%. The higher cost
of sales of Republic facilities is mainly a result of higher labor costs prevailing in our U.S. operations, and the higher costs
of the raw materials that our U.S. operations use in the production of SBQ steel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Scrap metal, electricity, iron ore coke,
ferroalloys, electrodes and refractory products are the principal materials that we use to manufacture our steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Scrap metal</I>. Scrap metal is among
the most important components for our steel production and accounted for approximately 56% of our consolidated manufacturing conversion
cost in 2011 (64% of the manufacturing conversion cost in our Mexico operations and 47% of the manufacturing conversion cost in
our U.S. operations), compared to 52% of our manufacturing conversion cost in 2010 (60% of the manufacturing conversion cost in
our Mexico operations and 44% of the manufacturing conversion cost in our U.S. operations). Scrap metal is principally generated
from automobile, industrial, naval and railroad industries. The market for scrap metal is influenced by availability, freight costs,
speculation by scrap brokers and other conditions largely beyond our control. Fluctuations in scrap costs directly influence the
cost of sales of finished goods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We purchase raw scrap from dealers in
Mexico and the San Diego area, and we process the raw scrap into refined scrap metal at our Guadalajara, San Luis, Mexicali and
Apizaco facilities. We meet our refined scrap metal requirements through: (i) our wholly owned scrap processing facilities, which
in the aggregate provided us with approximately 16.6% and 14.2% of our refined scrap tonnage in 2011 and 2010, respectively, and
(ii) purchases from third party scrap processors in Mexico and the southwestern United States, which, in the aggregate, provided
us with approximately 83% and 0.4%, respectively, in 2011 and approximately 85.4% and 0.4%, respectively, in 2010 of our refined
scrap metal requirements. We are a large scrap collector in the Mexicali, Tijuana and Hermosillo regions, and, by primarily dealing
directly with small Mexican scrap collectors, we believe we have been able to purchase scrap at prices lower than those in the
international and Mexican markets. We purchase scrap on the open market through a number of brokers or directly from scrap dealers
for our U.S. and Canadian facilities. We do not depend on any single scrap supplier to meet our scrap requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Iron Ore Pellets and Coke</I>. Our
U.S. and Canadian facilities purchase iron ore pellets and coke. These are the principal raw materials used in our blast furnaces.
We made no purchases of these raw materials in 2009, 2010 and 2011, since our Lorain, Ohio blast facility was idle during that
period. Our Mexican facilities and our Canton facilities do not use iron ore pellets or coke.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Ferroalloys, Electrodes and Refractory
Products</I>. In our Mexican operations, ferroalloys, electrodes and refractory products collectively accounted for approximately
10% of our manufacturing conversion cost in 2011, compared to 11% in 2010, and they accounted for 17% of our manufacturing conversion
cost in 2011, compared to 18% in 2010 in our U.S. and Canadian facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Ferroalloys are essential for the production
of steel and are added to the steel during manufacturing process to reduce undesirable elements and to enhance its hardness, durability
and resistance to friction and abrasion. For our Mexican operations, we buy most of our manganese ferroalloys from Compa&ntilde;&iacute;a
Minera Autl&aacute;n, S.A., and the remainder from Electrometal&uacute;rgica de Veracruz, S.A. de C.V., Manuchar Internacional,
S.A. de C.V. and Industria Nacional de la Fundici&oacute;n, S.A. de C.V. Our U.S. and Canadian facilities purchase most of their
ferroalloys from International Nickel, Climax Molybdenum Co., Considar Inc., Minerais U.S. LLC and Glencore LTD.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We obtain electrodes used to melt raw
materials from Ucar Carbon Mexicana, S.A. de C.V., Graphite Electrode Sales and SGL Carbon, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Refractory products include firebricks,
which line and insulate furnaces, ladles and other transfer vessels. We purchase our refractory products from RHI Refmex, S.A.
de C.V., LWB de M&eacute;xico, S.A. de C.V., Fedmet Resources Corp., Vesuvius de M&eacute;xico, S.A. de C.V., Mayerton Refractories
and Tecnolog&iacute;as Minerales de M&eacute;xico, S.A. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Electricity</I>. In 2011 and 2010,
electricity accounted for approximately 8% of our consolidated manufacturing conversion cost for the period. Electricity accounted
for 10% of our manufacturing conversion cost in 2011 in our Mexico facilities and is supplied by the <I>Comisi&oacute;n Federal
de Electricidad </I>(&ldquo;CFE&rdquo;). It accounted for 6% of the manufacturing conversion cost in 2011 and 2010 in our U.S.
and Canadian operations and is supplied by American Electric Power Company and Ohio Edison. We, like all other high volume users
of electricity in Mexico, pay special rates to CFE for electricity. Energy prices in Mexico have historically been very volatile
and subject to dramatic price increases in short periods of time. In the late 1990s, the CFE began to charge for electricity usage</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">based on
the time of use during the day and the season (summer or winter). As a result, we have modified our production schedule in order
to reduce electricity costs by limiting production during periods when peak rates are in effect. We cannot assure that any future
cost increases will not have a material adverse effect on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Natural Gas. </I>Natural gas (including
&ldquo;combustoleo&rdquo; which is an oil derivative that is less refined than gasoline and diesel fuel oil that can be used instead
of gasoline in our Mexicali plant) consisted of approximately 3% of our consolidated manufacturing conversion cost (3% of the manufacturing
conversion cost of our Mexican operations and 3% of the manufacturing conversion cost of our U.S. operations) in 2011, compared
to 4% in 2010 (5% in Mexico and 3% in the United States). We use natural gas cash-flow exchange contracts or swaps where we receive
a floating price and pay a fixed price to hedge our risk of from fluctuations in natural gas prices. Fluctuations in natural gas
prices from volume consumed are recognized as part of our operating costs. As applicable, we recognized the fair value of instruments
either as liabilities or assets. Such fair value and thus, the value of these assets or liabilities were restated at each month&rsquo;s-end.
As indicated in Note 4(d) to our consolidated financial statements, derivative financial instruments are recognized in the balance
sheet at fair value, which is initially represented by the amount of consideration agreed on. Such fair value is restated at the
end of each month based on the new estimate. We periodically evaluate the changes in the cash flows of derivative instruments to
analyze if the swaps are highly effective for mitigating the exposure to natural gas price fluctuations. In 2011, 2010 and 2009,
the fair value of derivatives that did not qualify for hedge accounting was adjusted through statement of income. For the derivatives
that qualified for hedge accounting, their fair value was adjusted through the stockholders&rsquo; equity under the caption fair
value of derivative financial instruments until such time as the related item the derivative hedges is recognized as income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We do not enter into contracts for speculation
purposes. We account for these derivative instruments in accordance with Accounting Standards Codification Section 815, <I>&ldquo;Derivatives
and Hedging&rdquo; </I>and with MFRS relating to Bulletin C-10 <I>&ldquo;Derivative Financial Instruments and Hedging.&rdquo;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Regulation</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">U.S. and Canadian Operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our U. S. and Canadian operations are
subject to U.S. and Canadian federal, state and local environmental laws and administrative regulations concerning, among other
things the management of, hazardous materials and the discharge of pollutants to the atmosphere and to surface waters. Our U.S.
operations have been the subject of administrative action by federal, state (or provincial) and local environmental authorities.
The resolution of any of these claims may result in significant liabilities. See Item 3.D. &ldquo;Risk Factors&mdash;Risk Factors
Related to our Business&mdash;In the event of environmental violations at our facilities we may incur significant liabilities&rdquo;
and Item 8. &ldquo;Financial Information&mdash;Legal Proceedings.&rdquo;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Environmental Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are subject to a broad range of environmental
laws and regulations, including those governing the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>discharges to the air, water and soil;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the handling and disposal of solid and hazardous wastes;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the release of petroleum products, hazardous substances, hazardous wastes, or toxic substances to the environment; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the investigation and remediation of contaminated soil, sediment and groundwater.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We monitor our compliance with these
laws and regulations through our environmental management system, and believe that we currently are in substantial compliance with
them, although we cannot assure you that we will at all times operate in compliance with all such laws and regulations. If we fail
to comply with these laws</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">and regulations,
we may be assessed fines or penalties or be subject to injunctive relief which could have a material adverse effect on us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Future changes in the applicable environmental
laws and regulations, or changes in the regulating agencies&rsquo; approach to enforcement or interpretation of their regulations,
could cause us to make additional capital expenditures beyond what we currently anticipate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We do not believe that our facility in
Lorain, Ohio is subject to the Maximum Achievable Control Technology (&ldquo;MACT&rdquo;) standard for Iron &amp; Steel Manufacturers,
because it does not emit hazardous air pollutants above the regulatory threshold. However, it is possible that in the future the
regulatory agency could disagree with our determination or that operations will change such that the applicability threshold is
exceeded. In that event, or under similar circumstances, we could incur additional costs of compliance. In addition, it is anticipated
that one or more of our facilities will be subject to the MACT standard for Industrial, Commercial and Institutional Boilers and
Process Heaters once that rule is promulgated. Once effective, this may cause us to incur additional costs at these facilities
in order to come into compliance. Our Canton, Ohio facility is subject to the MACT standard for Electric Arc Furnaces as an &ldquo;area
source.&rdquo; Revisions of this standard are under development and, once promulgated, may impose additional restrictions on our
Canton operations including those relating to mercury emissions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our integrated steel making operation
at Republic&rsquo;s Lorain, Ohio facility involves carbon and generates significant amounts of carbon dioxide (CO2), while our
other steel making operations in the United States and in Mexico use electric arc furnaces where carbon dioxide generation is primarily
linked to energy use. In the United States, the federal environmental agency has issued rules imposing inventory and reporting
obligations to which some of our facilities are subject, and has also issued rules that will affect preconstruction permits for
our facilities where increases in greenhouse gas pollutants are contemplated. The U.S. Congress has debated various measures for
regulating greenhouse gas emission (such as carbon dioxide) and may enact them in the future. Such laws and regulations may also
result in higher costs for coking coal, natural gas and electricity generated by carbon-based systems (such as coal-fired electric
generating facilities). Canada&rsquo;s federal government is also considering various approaches for reducing greenhouse gas emissions,
although we do not presently believe Republic&rsquo;s Hamilton, Ontario facility would be significantly impacted by this efforts
since it is not a steel-producing facility. Such future laws and regulations, whether in the form of cap-and-trade emissions permit
system, a carbon tax or other regulatory regime may have a negative effect on our operations. Additionally, international negotiations
to supplement and eventually replace the 1997 Kyoto Protocol are ongoing. The outcome of those negotiations or whether any of the
countries in which we operate will sign on the resulting agreement is unknown. More stringent gas policies and regulations could
adversely affect our business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Various federal, state (or provincial)
and local laws, regulations and ordinances govern the removal, encapsulation or disturbance of asbestos-containing materials (&ldquo;ACMs&rdquo;).
These laws, regulations and ordinances may impose liability for the release of ACMs and may permit third parties to seek recovery
from owners or operators of facilities at which ACMs were or are located for personal injury associated with exposure to ACMs.
We are aware of the presence of ACMs at our facilities but we currently believe that such materials are being managed in accordance
with applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In the United States, the federal environmental
agency is developing a new rule that is expected, among other things, to impose a timeline for the phasing out of PCB-containing
fluid in equipment that we currently use at many of our U.S. facilities. A preliminary notice regarding this future regulation
was issued in April 2010, and a formal proposed rule is expected in mid-2012. While the specifics of the proposed rule are not
yet known, the phase-out may take place over a period of 5 to 10 years following issuance of the final rule, with the complete
elimination of equipment containing PCBs above 50 ppm by 2025. Thus, once a final rule is issued, we may have to incur significant
costs at our facilities to remove and replace the existing PCB-containing equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Also in the United States, the federal
environmental agency recently tightened or is in the process of tightening several environmental air quality standards under the
Clean Air Act. More stringent ambient standards were adopted in 2010 for sulfur dioxide (SO2) and nitrogen oxide (NOx), and carbon
monoxide (CO) in 2011. More stringent standards for ozone, carbon monoxide and particulate matter are in the proposal stage with
final issuance expected to be issued later in 2012. As these new more stringent standards are implemented through the different
state programs, we are likely to experience higher costs associated with any preconstruction permitting of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">new or
modified sources at our U.S. facilities in 2012 and subsequent years. These costs are related to extensive dispersion modeling
and/or pre-construction monitoring not previously required.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Mexican Operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are subject to Mexican federal, state
and municipal laws, administrative regulations and Mexican Official Rules (<I>Normas Oficiales Mexicanas) </I>relating to a variety
of environmental matters, anti-trust matters, trade regulations, and tax and employee matters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Among other matters, Mexican tax returns
are open for review generally for a period of five years, and, according to Mexican tax law, the purchaser of a business may become
jointly and severally liable for unpaid tax liabilities of the business prior to its acquisition, which may have an impact on the
liabilities and contingencies derived from any such acquisitions. Although we believe that we are in compliance with all material
Mexican federal, state and municipal laws, administrative regulations and Mexican Official Rules, we cannot assure you that the
interpretation of the Mexican authorities of the laws and regulations affecting our business or the enforcement thereof will not
change in a manner that could increase our costs of doing business or could have a material adverse effect on our business, results
of operations, financial condition or prospects.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Environmental Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are subject to various Mexican federal,
state and municipal laws, administrative regulations and Mexican Official Rules (<I>Normas Oficiales Mexicanas) </I>relating to
the protection of human health, the environment and natural resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The major federal environmental laws
applicable to our operations are: (i) the General Law of Ecological Balance and Environmental Protection (<I>Ley General del Equilibrio
Ecol&oacute;gico y la Protecci&oacute;n al Ambiente </I>or &ldquo;LGEEPA&rdquo;) and its regulations, which are administered and
overseen by the Ministry of the Environment and Natural Resources (<I>Secretar&iacute;a de Medio Ambiente y Recursos Naturales
</I>or &ldquo;SEMARNAT&rdquo;) and enforced by the Ministry&rsquo;s enforcement branch, the Federal Attorney&rsquo;s Office for
the Protection of the Environment (<I>Procuradur&iacute;a Federal de Protecci&oacute;n al Ambiente </I>or <I>&ldquo;</I>PROFEPA&rdquo;);
(ii) the General Law for the Prevention and Integral Management of Waste (<I>Ley General para la Prevenci&oacute;n y Gesti&oacute;n
Integral de los Residuos </I>or the &ldquo;Law on Wastes&rdquo;), which is also administered by SEMARNAT and enforced by PROFEPA;
and (iii) the National Waters Law (<I>Ley de Aguas Nacionales</I>) and its regulations, which are administered and enforced by
the National Waters Commission (<I>Comisi&oacute;n Nacional de Agua</I>), also a branch of SEMARNAT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition to the foregoing, Mexican
Official Rules, which are technical standards issued by applicable regulatory authorities pursuant to the General Normalization
Law (<I>Ley General de Metrolog&iacute;a y Normalizaci&oacute;n</I>) and to other laws that include the environmental laws described
above, establish standards relating to air emissions, waste water discharges, the generation, handling and disposal of hazardous
wastes and noise control, among others. Mexican Official Rules regarding soil contamination and waste management were enacted in
order to protect these potential contingencies. Although not enforceable, the internal administrative criteria on soil contamination
established by PROFEPA are widely used as guidance in cases where soil remediation, restoration or clean-up is required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">LGEEPA sets forth the legal framework
applicable to the generation and handling of hazardous wastes and materials, the release of contaminants into the air, soil and
water, as well as the environmental impact assessment of the construction, development and operation of different projects, sites,
facilities and industrial plants similar to the ones owned and/or operated by us and our subsidiaries. In addition to LGEEPA, the
Law on Wastes regulates the generation, handling, transportation, storage and final disposal of hazardous waste.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">LGEEPA also mandates that companies that
contaminate soil be responsible for the clean-up. Furthermore, the Law on Wastes provides that owners and lessors of real property
with soil contamination are jointly and severally liable for the remediation of such contaminated sites, irrespective of any recourse
or other actions such owners and lessors may have against the contaminating party, and aside from the criminal or administrative
liability</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">to which
the contaminating party may be subject. The Law on Wastes also restricts the transfer of contaminated sites.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">PROFEPA can bring administrative, civil
and criminal proceedings against companies that violate environmental laws, regulations and Mexican Official Rules, and has the
power to impose a variety of sanctions. These sanctions may include, among others, monetary fines, revocation of authorizations,
concessions, licenses, permits or registries, administrative arrests, seizure of contaminating equipment, and in certain cases,
temporary or permanent closure of facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Additionally, as part of its inspection
authority, PROFEPA is entitled to periodically visit the facilities of companies whose activities are regulated by Mexican environmental
legislation, and verify compliance. Similar rights are granted to state environmental authorities pursuant to applicable state
environmental laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Companies in Mexico are required to obtain
proper authorizations, concessions, licenses, permits and registries from competent environmental authorities for the performance
of activities that may have an impact on the environment or may constitute a source of contamination. Such companies in Mexico
are also required to comply with a variety of reporting obligations that include, among others, providing PROFEPA and SEMARNAT
with periodic reports regarding compliance with various environmental laws. Among other permits, the operations and related activities
of the steel industry are subject to the prior obtainment of an environmental impact authorization granted by SEMARNAT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe that we have obtained all
the necessary authorizations, concessions, general operating licenses, permits and registries from the applicable environmental
authorities to duly operate our facilities, plants and sites, and sell our products and that we are in material compliance with
applicable environmental legislation. We, through our subsidiaries, have made significant capital investments to assure our production
and operation facilities comply with requirements of federal, state and municipal law and administrative regulation, and to remain
in compliance with our current authorizations, concessions, licenses, permits and registries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We cannot assure you that in the future,
we and our subsidiaries will not be subject to stricter Mexican federal, state or municipal environmental laws and administrative
regulations, or more stringent interpretation or enforcement of existing laws and administrative regulations. Mexican environmental
laws and administrative regulations have become increasingly stringent over the last decade, and this trend is likely to continue,
influenced recently by the North American Agreement on Environmental Cooperation entered into by Mexico, the United States and
Canada in connection with the North American Free Trade Agreement or NAFTA. Further, we cannot assure you that we will not be required
to devote significant expenditures to environmental matters, including remediation-related matters. In this regard, any obligation
to remedy environmental damages caused by us or any contaminated sites owned or leased by us could require significant unplanned
capital expenditures and be materially adverse to our financial condition and results of operations.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Water</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In Mexico, the National Waters Law regulates
water resources. In addition, the Mexican Official Rules govern the quality of water. A concession granted by the National Waters
Commission is required for the use and exploitation of national waters. All of our facilities have a five-year renewable concession
to use and exploit underground waters from wells in order to meet the water requirements of our production processes. We pay the
National Waters Commission duties per cubic meter of water extracted under our concessions. We believe we are in substantial compliance
with all the requirements imposed by each of the concessions we have obtained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the National Waters Law,
companies that discharge waste into national water bodies must comply with certain requirements, including maximum permissible
contaminant levels. Periodic reports on water quality must be provided by dischargers to applicable authorities. Liability may
result from the contamination of underground waters or recipient water bodies. We believe that we are in substantial compliance
with all water and waste water legislation applicable to us.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Antitrust Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are also subject to the Mexican Antitrust
Law (<I>Ley Federal de Competencia Econ&oacute;mica</I>), which regulates monopolies and monopolistic practices in Mexico and requires
Mexican government approval of certain mergers, acquisitions and joint ventures. We believe that we are currently in material compliance
with the Mexican Antitrust Law. However, due to our growth strategy of acquiring new businesses and assets and because we are a
large manufacturer with a significant share of the markets in Mexico with respect to certain of our products, we may be subject
to greater regulatory scrutiny in the future.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Measurements Law</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexico&rsquo;s Ministry of Economy (<I>Secretar&iacute;a
de Econom&iacute;a</I>), through the General Rules Department (<I>Direcci&oacute;n General de Normas </I>or &ldquo;DGN&rdquo;),
promulgates regulations regarding many products that we manufacture. Specifically, pursuant to the Measurements Law (<I>Ley Federal
sobre Metrolog&iacute;a y Normalizaci&oacute;n</I>), the DGN issues specifications on the quality and safety standards for our
product lines. We believe that all of our products are in material compliance with all applicable DGN regulations.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Trade Regulation Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have experienced significant competition
from imports into Mexico in the past as a result of excess worldwide steel production capacity, particularly in periods of economic
slowdown, and as a consequence of the Peso&rsquo;s appreciation, making imports cheaper and more competitive in peso terms. In
2003, imports declined as international market conditions improved and the peso weakened. Recently, the Mexican government, at
the request of CANACERO, has taken several measures to prevent unfair trade practices such as dumping the steel import market.
The overall climate for imports in Mexico is influenced by the free trade agreements that Mexico has entered into with other countries,
as well as the level of tariffs and anti-dumping duties (some of which are described below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have benefited from the free trade
agreements that Mexico has entered into. Specifically, we have directly benefited from our ability to export finished steel products
directly to export markets and compete with similar products manufactured in those markets. We have also indirectly benefited from
increased demand from our domestic customers who similarly manufacture their products to foreign markets under free trade agreements.
Nevertheless, we cannot assure you that the trade agreements affecting our business or the enforcement thereof will not change
in a manner that could have a material adverse effect on our business, results of operations, financial condition or prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>North American Free Trade Agreement</I>.
NAFTA became effective on January 1, 1994. NAFTA provided for the progressive elimination over a period of ten years of the 10%
duties formerly in effect on most steel products imported into Mexico from the United States and Canada, including those that compete
with our main product lines. There is currently no duty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Mexican-European Community Free Trade
Agreement</I>. The Mexican-European Free Trade Agreement, or &ldquo;MEFTA&rdquo;, became effective on July 1, 2000. MEFTA provides
for the progressive elimination of Mexican duties for steel producers that are members of the European Union over a period of 6.5
years for finished steel products, including those that compete with our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Mexico-Japan Economic Association
(the &ldquo;Association&rdquo;)</I>. On January 1, 2004, Japan and the other members of the G-7, agreed to reduce the steel tariffs
to zero percent, so Mexico has benefited from this rate since such date. However, Mexico is sensitive to the steel exports coming
from Japan, so the Association was negotiated in the following terms: (i) the specialized steel that is not produced in Mexico,
and that is used to produce vehicles, spare parts, electronics, machinery and heavy equipment, was released from any tariffs, as
from the effective date of the Association, (ii) the Japanese steel that Mexico imports will be maintained without changes (13%
and 18%) during the first five years as of the effective date (iii) the steel products coming from Japan will start paying less
taxes gradually as from January 1, 2010 until reaching a zero percent rate in 2015, (iv) the products to be imported from the under
the programs established by the Association, will pay the tariffs pursuant to the fixed tariffs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">established
in such Sector Programs, so the electronic and vehicles industries will be exempted as of the effective date of the Association.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Other Trade Agreements</I>. In the
last several years, Mexico has signed other free trade agreements with Israel (2000), Iceland, Norway, Liechtenstein and Switzerland
(2001), and with the following Latin American countries: Chile (1992 and amended in 1999); Venezuela and Colombia (1995); Costa
Rica (1995); Bolivia (1995); Nicaragua (1998); Honduras, El Salvador and Guatemala (2001); and Uruguay (2003). We do not anticipate
any significant increase in competition in the Mexican steel market as a result of these trade agreements due to their minimal
steel production or, in the case of Venezuela and Chile, minimal share of the Mexican market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Dumping and Countervailing Duties</I>.
We are or have been a party to, or have been affected by, numerous steel dumping and countervailing duty claims. Many of these
claims have been brought by Mexican steel producers against international steel companies, while others have been brought against
Mexican steel companies. In certain instances, such cases have resulted in duties being imposed on certain imported steel products
and, in a few instances, duties have been imposed on Mexican steel exports. In the aggregate, these duties have not had a material
impact on our results of operations.</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Organizational Structure</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The chart below sets forth a summary
of our corporate structure</P>

<P STYLE="font: 9pt Arial; margin-top: 0; text-align: center; margin-bottom: 0; color: Red"><IMG SRC="image_048.gif" ALT=""></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Includes the following subsidiaries: Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V. (99.99%);
Coordinadora de Servicios Sider&uacute;rgicos de Calidad, S.A. de C.V. (100%); Comercializadora Simec, S.A. de C.V. (100%); Industrias
del Acero y del Alambre, S.A. de C.V. (99.99%); Procesadora Mexicali, S.A. de C.V. (99.99%); Servicios Simec, S.A. de C.V. (100%);
Sistemas de Transporte de Baja California, S.A. de C. V. (100%); Operadora de Metales, S.A. de C.V. (100%); Operadora de Servicios
Sider&uacute;rgicos de Tlaxcala, S.A. de C.V. (100%); Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.
(100%); Operadora de Servicios de la Industria Sider&uacute;rgica ICH, S.A. de C.V. (100%); Arrendadora Simec S.A. de C.V. (100%);
Sider&uacute;rgica de Baja California, S.A. de C.V. (99.95%); CSG Comercial, S.A. de C.V. (99.95%); Comercializadora de Productos
de Acero de Tlaxcala, S.A. de C. V. (99.95%); Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V. (100%); Comercializadora
MSAN, S.A. de C.V. (100%); Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara S.A. de C.V. (99.99%); Simec Acero, S.A. de
C.V. (100%); Undershaft investment N. V., (100%); Simec USA Corp. (100%); Pacific Steel Projects Inc. (100%); Simec Steel Inc.</TD></TR></TABLE>


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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">&nbsp;</TD><TD>
(100%), Simec International, S. A. de C. V.(100%) Corporativos G&amp;DL, S.A. de C.V. (100%) Simec International 7, S. A. de C.
V., (99.99%) and Corporaci&oacute;n ASL, S.A. de C.V. (99.99%).</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Our principal Mexican facilities consist of steel-making facilities in Guadalajara, Jalisco; Mexicali, Baja California; Apizaco,
Tlaxcala; and cold finishing facilities in Cholula, Puebla; and San Luis Potos&iacute;., these facilities are operated by Simec
International 6, S.A. de C.V., and began operations in November 2010. Simec International 2, Inc., Simec International 3, Inc.,
Simec International 4, Inc. and Simec International 5, Inc. ceased operations as of December 2010.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>The remaining 49.8% of SimRep is owned by our controlling shareholder, Industrias CH.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>SimRep, Co. owns 100% of Republic Steel, Inc. Our principal U.S. and Canadian facilities consist of a steel-making facility
in Canton, Ohio; a steel- making and hot-rolling facility in Lorain, Ohio; a hot-rolling facility in Lackawanna, New York; and
cold finishing facilities in Massillon, Ohio; Solon, Ohio; Gary, Indiana, and Hamilton, Memphis, Tennessee; Ontario, Canada, all
of which are owned directly by Republic.</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: -0.25in">(5)&nbsp; &nbsp; &nbsp;Grupo
San facilities are conformed by Corporacion Aceros DM, S. A. de C. V. (100%) and Subsidiaries, Abastecedora Sider&uacute;rgica,
S. A. de C. V. (99.98%), Aceros DM, S. A. de C. V. (99.99%) Acero Transportes SAN, S. A. de C. V. (99.99%), Aceros San Luis, S.
A. de C. V. (99.99%, Malla San, S. A. de C. V., (99.98%), Comercializadora Aceros DM, S.A. de C.V. (99.99%) y Promotora de Aceros
san Luis, S.A. de C.V. (99.99%).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">The following table identifies each of our significant operating
subsidiaries, including its country of incorporation and our percentage ownership thereof at December 31, 2011:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 64%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Name of
        Subsidiary</B></P></TD>
    <TD STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Country
        of<BR>
 Incorporation</B></P></TD>
    <TD STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Ownership
        <BR>
Interest (%)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Undershaft Investments, N.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Cura&ccedil;ao</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Pacific Steel, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">SimRep Corporation and subsidiaries (Republic)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">50.22%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Coordinadora de Servicios Sider&uacute;rgicos de Calidad, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Comercializadora Simec, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Industrias del Acero y del Alambre, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Procesadora Mexicali, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Servicios Simec, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Sistemas de Transporte de Baja California, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Operadora de Metales, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Operadora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Operadora de Servicios de la Industria Sider&uacute;rgica ICH, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Arrendadora Simec S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Arrendadora Norte de Matamoros, S.A. de C.V. (sold in May, 2011)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">CSG Comercial, S.A. de C.V</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.95%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Comercializadora de Productos de Acero de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.95%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Sider&uacute;rgica de Baja California, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.95%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Corporaci&oacute;n Aceros DM, S.A. de C.V. and subsidiaries</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Comercializadora MSAN, S.A de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International 2, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International 3, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International 4, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International 5, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Corporaci&oacute;n ASL, S.A. de C.V. (since 2010)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International 6, S. A. de C. V. (since 2010)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Acero Transportes San, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec International 7, S. A. de C. V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec Acero, S. A. de C. V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec USA, Corp.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
</TABLE>


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<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 64%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Name of
        Subsidiary</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 18%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Country
        of<BR>
 Incorporation</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 18%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Ownership
        <BR>
Interest (%)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Pacific Steel Projects, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Simec Steel, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Corporativos G&amp;DL, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">GV do Brasil Industria e Comercio de A&ccedil;o LTDA.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Brazil</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">100.00%</TD></TR>
</TABLE>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>Property, Plants and Equipment</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our Operations and Production Facilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We conduct our operations at fourteen
facilities throughout North America. At December 31, 2011, our crude steel production capacity was 4.8 million tons, of which 1.2
million tons were based on an integrated blast furnace technology, and 3.6 million were based on electric arc furnace, or mini-mill,
technology. Our Mexican facilities have 2.2 million tons of crude steel production capacity, operating five mini-mill facilities.
Our U.S. operations have 2.6 million tons of crude steel production capacity. In addition, we have 3.7 million tons of rolling
and finishing capacity, of which 1.8 million are located in Mexico, and 1.9 million are located in the United States and Canada.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We operate six mini-mills, five in Mexico
and one in the United States. The Mexican mini-mills are located in Guadalajara, Jalisco; Apizaco, Tlaxcala; Mexicali, Baja California;
as well as two in San Luis Potosi, San Luis Potos&iacute;. Our mini-mill in the United States is located in Canton, Ohio. We also
operate an integrated blast furnace in Lorain, Ohio. We operate rolling and finishing facility in each of our mill facilities in
Cholula and in the United States, (except in Canton, Ohio) and Canada.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Because we operate both mini-mill and
integrated blast furnace production facilities, we can allocate production between each type of facility based on efficiency and
cost. In addition, as long as our facilities are not operating at full capacity, we can allocate production based on the relative
cost of basic inputs (iron ore, coke, scrap metal and electricity) to the facility where production costs would be the lowest.
Our production facilities are designed to permit the rapid changeover from one product to another. This flexibility permits us
to efficiently produce small volume orders to meet customer needs and to produce varying quantities of standard product. Production
runs, or campaigns, occur on four to eight weeks cycles, minimizing customer waiting time for both standard and specialized products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We use scrap metal and iron ore to produce
our finished steel products. We produce molten steel using both an electric arc furnace and integrated blast furnace technology,
alloying elements and carbon are added, and which then is transported to continuous casters for solidification. The continuous
casters produce long, square strands of steel that are cut into billet and transferred to the rolling mills for further processing
or, in some cases, sold to other steel producers. In the rolling mills, the billet is reheated in a walking beam furnace with preheating
burners, passed through a rolling mill for size reduction and conformed into final sections and sizes. The shapes are then cut
into a variety of lengths. In addition, to producing billet, our Canton, Ohio facility also produces blooms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our mini-mill plants use an electric
arc furnace to melt ferrous scrap and other metallic components, which are then cast into long, square bars called billet in a
continuous casting process, all of which occurs in a melt shop. The billet is then transferred to a rolling mill, reheated and
rolled into finished product. In contrast, an integrated steel mill heats iron pellets and other primary materials in a blast furnace
to first produce pig iron, that must be refined in a basic oxygen furnace to liquid steel, and then cast to billet and finished
product. Mini-mill plants typically produce certain steel products more efficiently because of the lower energy requirements resulting
from their smaller size and because of their use of ferrous scrap. Mini-mills are designed to provide shorter production runs with
relatively fast product changeover times. Integrated steel mills are more efficient in producing longer runs and are able to produce
certain steel products that a mini-mill cannot.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The production levels and capacity utilization
rates for our melt shops and rolling mills for the periods indicated are presented below.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Production Volume and Capacity Utilization</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2009</B></P></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2010</B></P></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(tons in thousands)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold">Melt shops</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">&nbsp;&nbsp;Steel billet production</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,110.0</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,458.3</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,495.0</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">&nbsp;&nbsp;Annual installed capacity<SUP>(1)</SUP>&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,532.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,532.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,797.2</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">&nbsp;&nbsp;Effective capacity utilization</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 46.6%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 54.2%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 52.0%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold">Rolling mills</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">&nbsp;&nbsp;Total production</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,015.6</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,354.4</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,440.4</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">&nbsp;&nbsp;Annual installed capacity<SUP>(1)</SUP>&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,521.9</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,521.9</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,757.8</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">&nbsp;&nbsp;Effective capacity utilization</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 57.2%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 66.8%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 64.9%</TD></TR>
</TABLE>
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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Annual installed capacity is determined based on the assumption that billet of various specified diameters, width and length
is produced at the melt shops or that a specified mix of rolled products are produced in the rolling mills on a continuous basis
throughout the year except for periods during which operations are discontinued for routine maintenance, repairs and improvements.
Amounts presented represent annual installed capacity as of December 31 for each year.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Mexican Operations and Facilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table presents production
by product at each of our Mexican facilities as a percentage of total production at that facility for 2011.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Mexican Production per Facility
by Product<BR>
Location</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 25%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Product</B></P></TD>
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Guadalajara</B></P></TD>
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Mexicali</B></P></TD>
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Apizaco/<BR>
        Cholula</B></P></TD>
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>San Luis</B></P></TD>
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Total</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="6" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(Production %)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">I Beams</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">19.7%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">5.2%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Channels</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">11.4%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">11.9%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">4.4%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Angles</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">25.1%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">27.2%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">1.1%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">11.3%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Hot rolled bars (round, square And hexagonal rods)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">26.6%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">8.4%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">53.4%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0.6%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">21.0%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Rebar</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">3.9%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">44.5%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">10.0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">79.7%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">38.1%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Flat bars</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">8.2%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">7.0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">17.3%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">7.2%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Cold finished Bars</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">4.5%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0.1%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">18.9%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">5.6%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Electro-Welded Wire mesh</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">4.4%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">1.6%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Wire rod</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">7.3%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">2.7%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Electro-Welded Wire mesh panel</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">6.9%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">2.4%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Other</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0.6%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0.9%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0.4%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0.5%</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">100%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">100%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">100%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">100%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">100%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Guadalajara</I>. Our Guadalajara mini-mill
facility is located in central western Mexico in Guadalajara, Jalisco which is Mexico&rsquo;s second largest city. Our Guadalajara
facilities and equipment include one improved electric arc furnace utilizing water-cooled sidewalls and roof, one four-strand continuous
caster, five reheating furnaces and three rolling mills. The Guadalajara mini-mill has an annual installed capacity of 350,000
tons of billet and an annual installed capacity of finished product of 480,000 tons. In 2011, the Guadalajara mini-mill produced
294,320 tons of steel billet and 348,757 tons of finished product, operating at 84% capacity for billet production and 73% capacity
for finished product production. The Guadalajara rolling facilities process billet production from our</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">Mexicali
and Apizaco mills. Our Guadalajara facility is 336 miles from Mexico City. Our Guadalajara facility mainly produces structurals,
SBQ steel, light structurals and rebars.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Guadalajara Mini-Mill&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Steel sales (thousands of tons)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">344</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">393</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">383</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average finished product price per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 9,073</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 9,069</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 10,809</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average scrap cost per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,129</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,072</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,983</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of finished product</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,922</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,892</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,143</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of billet</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,583</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,707</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in"><I>Mexicali</I>. In 1993, we began operations
at our mini-mill located in Mexicali, Baja California. The mini-mill is strategically located approximately 22 miles south of the
California border and approximately 220 miles from Los Angeles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our Mexicali facilities and equipment
include one electric arc furnace utilizing water-cooled sidewalls and roof, one four-strand continuous caster, one walking beam
reheating furnace, one SACK rolling mill, a Linde oxygen plant and a water treatment plant. This facility has an annual installed
capacity of 430,000 tons of steel billet and an annual installed capacity of finished product of 250,000 tons. Excess billet produced
at the Mexicali facility is used primarily by the Guadalajara facility. This allows us to increase the utilization of the Guadalajara
facility&rsquo;s finishing capacity, which exceeds its production capacity. In 2011, the Mexicali mini-mill produced approximately
257,558 tons of billet, of which the Guadalajara mini-mill used 51,035 tons. In 2011, the Mexicali mini-mill produced 184,793 tons
of finished products. In 2011 we operated the Mexicali mini-mill at 60% capacity for billet production and at 74% capacity for
finished product production. Our facility is strategically located and has access to key markets in Mexico and the United States,
stable sources of scrap, electricity, a highly skilled workforce and other raw materials. The Mexicali mini-mill also is situated
near major highways and a railroad linking the Mexicali and Guadalajara mini-mills, allowing for coordinated production at the
two facilities. Our Mexicali facility mainly produces structurals, light structurals and rebar. In 2011, 45% of the products produced
at the Mexicali mini-mill were rebar, 27% were angles, 8% were hot rolled bars (round, square and hexagonal rods) and the remaining
20% were other products, principally channels and flat bars.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Mexicali Mini-Mill</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Steel sales (thousands of tons)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">177</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">180</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average finished product price per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 7,812</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 9,090</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 10,072</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average scrap cost per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,999</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,895</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,028</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of finished product</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,204</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,172</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,564</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of billet</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,456</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,584</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Apizaco mini-mill and Cholula facility</I>.
We have operated the Apizaco mini-mill and Cholula facility since August 1, 2004. The mini-mill is located in central Mexico in
Apizaco, Tlaxcala. Our Apizaco facilities and equipment include one EBT Danieli electric arc furnace utilizing water-cooled sidewalls
and roof, two ladle stations (one Danieli and the other Daido), one Daido degasification station, one Danieli four-strand continuous
caster, two walking beam reheating furnaces and two rolling mills (one Danieli and the other Pomini). This facility has an annual
installed capacity of 510,000 tons of steel billet and an annual installed capacity of finished product of 480,000 tons. In 2011,
the Apizaco mini-mill produced 451,113 tons of steel billet and 366,878 tons of finished products. In 2011 we operated the Apizaco
mini-mill at 88% capacity for billet production and at 76% capacity for finished product production. Our Apizaco facility is 1,112
miles from Mexicali and less than 124 miles from Mexico City. Our Apizaco facility mainly produces SBQ steel, light structurals
and rebar. Our Cholula facility is</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">approximately
25 miles from our Apizaco facility, which allows the integrated operations of the Apizaco mini-mill and Cholula facility. Our
Cholula facilities and equipment include cold drawing and turning machines for peeling bars. This facility has an annual installed
capacity of finished product of 70,000 tons. In 2011, the Cholula facility produced 65,499 tons of finished products, at 94% capacity.
Our Cholula facility mainly produces cold finished SBQ steel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011, 10% of the products we produced
at the Apizaco and Cholula facilities were rebar, 54% were hot rolled bars (round, square and hexagonals) and the remaining 36%
were other products, flat merchant bar and cold finished products.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Apizaco Mini-Mill and Cholula Facility&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Steel sales (thousands of tons)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">347</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">284</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">343</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average finished product price per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 8,510</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 10,651</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 11,942</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average scrap cost per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,111</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,660</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,725</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of finished product</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,856</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,755</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,360</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of Billet</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,714</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,105</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,090</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>San Luis Operations and Facilities.
</I>We have operated our San Luis facilities since we acquired them on May 30, 2008. The facilities are located in central Mexico
in San Luis Potosi, in the state of San Luis Potosi. Our San Luis facilities and equipment include four electric arc furnaces,
three continuous casters, three reheating furnaces, two rebar rolling mills and one wire rod rolling mill. As of December 31, 2011,
these facilities had an annual installed capacity of 860,000 tons of billet and 620,000 tons of finished product. In 2011, the
San Luis facilities produced 495,935 tons of steel billet and 500,729 tons of finished product operating at 58% capacity for billet
production and 81% capacity for finished product production. Our San Luis facilities mainly produces rebar, light structurals and
wire rod. In 2011, 80% of the products produced at the San Luis facilities were rebar, 7% wire rod, and the remaining 13% were
other light structural.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth, for the
periods indicated selected operating data for our San Luis facilities.&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Steel sales (thousands of tons)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">513</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">542</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">503</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average finished product price per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 7,264</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp;&nbsp;&nbsp; 8,164</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 10,133</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average scrap cost per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,115</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,287</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,935</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of finished product</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,874</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,952</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,166</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of Billet</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,382</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,511</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,630</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">U.S. and Canada Operations and Facilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have operated our Republic facilities
(in Ohio, New York, Indiana and Canada) since we acquired them from Republic on July 22, 2005. As of December 31, 2011, these facilities
had an annual installed capacity of 2,647,000 tons of billet and 1,927,800 tons of finished <I>product</I>. In 2011, Republic facilities
produced 996,106 tons of steel billet, of which 71,454 tons were sold as semi-finished. The remainder went to the Lorain, Ohio
and Lackawanna, New York facilities for further processing. For the same period, Republic facilities produced 779,194 tons of hot-rolled
bar, of which 99,575 tons were used by the cold finish facilities. Republic facilities produced 260,094 tons of cold finish bars.
During this period, 74.8% of the products shipped from Republic facilities were hot-rolled bars, 11.6% were cold-finished bars,
and 13.6% were other semi-finished trade products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth, for the
periods indicated selected operating data for our Republic facilities.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Steel sales (thousands of tons)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">636</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">845</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">880</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average finished product price per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 12,373</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 14,146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;Ps.&nbsp;&nbsp; 16,050</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average scrap cost per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,494</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,944</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,678</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average iron ore pellet cost per ton</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,906</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,240</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,367</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,975</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,641</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,835</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Lorain, Ohio</I>. The Lorain facility
mainly produces SBQ steel and operates an integrated steel mill. We operate one blast furnace, two 220-ton basic oxygen furnaces,
two ladle metallurgy facilities, a vacuum degasser, a five-strand continuous bloom caster, a six-strand billet caster, a billet
rolling mill and two bar rolling mills.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our Lorain facility had, at December
31, 2011, an annual installed capacity of 1,264,000 tons of steel billet and 838,000 tons of finished <I>product</I>. During 2011,
the Lorain facility operated at 35% of capacity for 9-10&rdquo; rolling mill and 56% of capacity for 20&rdquo; mill finishing and
shipping production, and it produced 375,853 tons of finished products. The facility did not produce any steel billets in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Canton, Ohio</I>. Our Canton facility
mainly produces SBQ steel and includes two 200-ton top charge electric arc furnaces, a 5-strand bloom/billet caster, two ladle
metallurgical furnaces, two vacuum degassers and two slag rakes. This facility also includes a combination Caster rolling facility
that continuously casts blooms in a 4-strand caster, heats the blooms to rolling temperature in a walking beam furnace, then rolls
billets through an 8-stand rolling mill in an inline operation. We installed and commissioned the electric arc furnace, the bloom/billet
caster, ladle metallurgical furnace and vacuum degasser in 2005. Other Canton equipment includes a Mecana billet inspection line,
four stationary billet grinders, a saw line and a quality verification line (or &ldquo;QVL line&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Canton produces blooms and billets for
the three rolling mills in Republic facilities and for trade customers. We use the QVL inspection <I>line</I> to inspect finished
bar produced in Lackawanna and Lorain. As of December 2011, the Canton facility had annual installed capacity of 1,383,000 tons
of steel billet. In 2011, this facility produced 996,106 tons of blooms, billets and other semi-finished trade product and was
operated at 72% capacity of steel billet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Lackawanna, New York</I>. Our Lackawanna
facility mainly produces SBQ steel and includes a three-zone walking beam billet reheat furnace, a recently upgraded 22 stand rolling
mill capable of producing rounds, squares, and hexagons in both cut length and coils. This facility produces hot rolled bar sizes
that range from .562&quot; to 3.250&quot; with coil weights up to 6,000 lb. Our Lackawanna facility&rsquo;s finishing equipment
includes a QVL inspection line and three saw lines. We sell a portion of the hot rolled bars produced at our Lackawanna facility
to trade customers, and we also ship a portion of the finished bars to our cold finishing operations for further processing. As
of December 31, 2011, the Lackawanna facility had annual installed capacity of 599,000 tons of hot rolled bars. In 2011, this facility
produced 403,341 tons of hot rolled bars and was operated at 67.4% capacity of finished product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Massillon, Ohio</I>. Our Massillon
facility mainly produces SBQ steel and contains a cold finishing facility which includes the machinery and equipment to clean,
draw, turn, chamfer, anneal, grind, straighten and saw bars. Our Massillon facility had, at December 31, 2011, an annual installed
capacity of 125,000 tons of finished product. During 2011, the Massillon facility was operated at 62% capacity of finished product
and produced 77,384 tons of cold finished bars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Gary, Indiana</I>. Our Gary facility
mainly produces SBQ steel and has a cold finishing facility which includes the machinery and equipment to clean, draw, turn, chamfer,
anneal, grind, straighten and saw bars. As of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">December
31, 2011, the Gary facility had annual installed capacity of 71,000 tons of cold finished bars. In 2011, this facility produced
34,655 tons of cold finished bars and was operated at 49% capacity of finished product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Solon Ohio and Memphis, Tennessee.
</I>Our Solon and Memphis facilities, acquired in February, 2011, mainly produce Cold Heading Quality (CHQ) wire products and have
wire drawing and finishing facilities that include the machinery and equipment to clean and coat, draw, and anneal wire. As of
December 31, 2011, the Solon and Memphis facilities had installed capacities of 163,000, and 73,000 tons, respectively, for wire
products. For the period February 4, 2011 through December 31, 2011, the Solon facility produced and shipped 119,841 tons of wire
products and was operated at 73% capacity of finished product.&nbsp; No wire products were produced at the Memphis facility during
2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Hamilton, Ontario, Canada.</I> Our
Hamilton facility mainly produces SBQ steel and has a cold finishing facility which includes the machinery and equipment to clean,
draw, turn, chamfer, anneal, grind, straighten and saw bars. As of December 31, 2011, the Hamilton facility had annual installed
capacity of 59,000 tons of cold finished bars. In 2011, this facility produced 28,214 tons of cold finished bars and was operated
at 48% capacity of finished product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table shows the products
that we produce, the equipment that we use and the volume that we produce in each of our separate production facilities:</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Production per Facility by Product,
Equipment and Volume</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Location</B></P></TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Product
        (%)</B></P></TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Equipment</B></P></TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011 Annual<BR>

        Production Volume <BR>
(tons)</B></P></TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Finished
        Product <BR>
Annual Installed <BR>
Capacity (tons)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Guadalajara</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Structurals (43%); Light structurals (34%); SBQ (17%), Rebar (6%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">electric arc furnace with continuous caster rolling mill and bar processing lines</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">348,757</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">480,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Mexicali</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Structurals (17%); Rebar (45%); Light structurals (38%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">electric arc furnace with continuous caster and bar rolling mills</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">184,793</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">250,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Apizaco and Cholula</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (67%); Rebar (10%); Light structurals (23%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">electric arc furnace with vacuum tank degasser, continuous caster, bar rolling mills, cold drawn and bar turning equipment</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">366,878</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">480,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Aceros DM, San Luis Potos&iacute;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Rebar (71%), Light structurals (3%), Wire rod (10%), Electro-Welded wire mesh&nbsp; (6%), Electro-Welded wire mesh panel (10%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">three electric arc furnaces, two continuous casters, two reheating furnaces, rebar rolling mill and wire rod rolling mills</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">345,332</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">400,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Aceros San Luis, San Luis Potos&iacute;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Rebar (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">electric arc furnace, continuous caster, reheating furnace and rebar rolling mill</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">155,397</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">220,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

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<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Location</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Product
        (%)</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Equipment</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011 Annual<BR>

        Production Volume <BR>
(tons)</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Finished
        Product <BR>
Annual Installed <BR>
Capacity (tons)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Lorain(1)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">blast furnace, vacuum tank degasser, continuous caster, bar and wire rod rolling mills</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">375,853</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">838,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Canton(2)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">electric arc furnace, vacuum tank degasser, continuous caster</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">996,106</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1,383,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Lackawanna</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">reheat furnace, bar and wire rod rolling mills</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">403,341</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">599,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Massillon</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">cold drawn bar turning and heat treating equipment</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">77,384</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">125,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Gary</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">cold drawn bar turning and heat treating equipment</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">34,655</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">71,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Solon and Memphis (acquired in February, 2011) (3)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Cold Heading Quality (CHQ) wire products (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">machinery and equipment to clean and coat, draw, and anneal wire</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">119,841</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">236,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Hamilton</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SBQ (100%)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">cold drawn bar turning and heat treating equipment</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">28,214</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">59,000</TD></TR>
</TABLE>
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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Production capacity is for rolling only.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Production capacity is for billets only<I>.</I></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>The installed capacity is considerate for ten months.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_006"></A>Item 4A. Unresolved Staff Comments</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">There are no unresolved written comments
received from the staff of the U.S. Securities and Exchange Commission (the &ldquo;Commission&rdquo;) regarding our periodic reports
under the U.S. Securities Exchange Act of 1934, as amended.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item</FONT>&nbsp;</TD><TD><A NAME="a_007"></A><FONT STYLE="color: #010000">5.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Operating
and Financial Review and Prospects</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following discussion is derived from
our audited financial statements, which are presented elsewhere in this annual report. This discussion does not include all of
the information included in our financial statements. You should read our financial statements to gain a better understanding of
our business and our historical results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have prepared our financial statements
in accordance with MFRS, which differ in certain significant respects from U.S. GAAP. See Note 25 to our consolidated financial
statements included elsewhere herein for the years ended December 31, 2009, 2010 and 2011 for a summary of the principal differences
between MFRS and U.S. GAAP as they relate to us and a reconciliation to U.S. GAAP of net income and stockholders&rsquo; equity,
a statement of changes in stockholders&rsquo; equity and a statement of cash flows under U.S. GAAP. Our consolidated financial
statements and all other financial information contained herein with respect to the year ended December 31 2007 are presented in
constant pesos with purchasing power as of December 31, 2007, unless otherwise noted. Beginning January 1, 2008, as a result of
the adoption of the MFRS NIF B-10, &ldquo;Effects of Inflation&rdquo;, we have ceased recognition of inflation because cumulative
inflation in Mexico, as published by the Mexican Central Bank (Banco de Mexico), from 2005 to 2007 was 11.6%, and from 2008 to
2011 was 19.6%. However, the financial information for prior periods was presented in Mexican pesos with purchasing power as of
December 31, 2007, the last date on which we recognized the effects of inflation in our financial statements.</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Operating Results</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are producers of SBQ and structural
steel products. Accordingly, our net sales and profitability are highly dependent on market conditions in the steel industry which
is greatly influenced by general economic conditions in North America and globally. The sharp reduction in economic activity and
consumer demand in general, and in the automotive, construction and manufacturing industries in particular, in North America starting
in the fourth quarter of 2008 has had a significant negative impact on the demand and price levels for all steel products, including
SBQ and structural steel products. These economic conditions have had an impact on all parts of our operations since the fourth
quarter of 2008. Our sales dropped in 2009 by 37% in the automotive sector and by 21% in the energy sector relative to 2008. Demand,
production levels and prices in certain segments and markets have recovered and stabilized to a certain degree, although the extent,
timing and duration of the recovery and potential return to pre-crisis levels remains uncertain. Our sales increased in 2010, as
compared to 2009, by 48% in the automotive sector, 16% in the independent distributor sector and 80% in the mining sector. The
total increase in net revenue from sales of SBQ products in 2010, as compared to 2009, was of 34%. Our net revenue from sales decreased
in 2011, as compared to 2010, by 7% in the automotive sector, increased 1% in the independent distributor sector and increased
22% in the mining sector. The total increase in net revenue from sales of SBQ products in 2011, as compared to 2010, was 16%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As a result of the significant competition
in the steel industry and the commodity-like nature of some of our products, we have limited pricing power over many of our products.
The North American and global steel markets influence finished steel product prices. Nevertheless, many of our products are SBQ
products for which competition is limited, and, therefore, these products tend to generate somewhat higher margins compared with
our more commoditized steel products. We attempt to adjust the mix of our product output toward higher margin products to the extent
that we are able to do so, and we also adjust our overall product levels based on the product demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We focus on controlling our cost of sales
as well as our selling, general and administrative expenses. Our cost of sales largely consist of the costs of acquiring the raw
materials necessary to manufacture steel, primarily scrap metal and iron ore. Market supply and demand generally determine scrap
and iron ore prices, and, as a result, we have limited ability to influence their cost or the costs of other raw materials, including
energy costs; however, in 2009, 2010 and 2011 we did not purchase iron ore pellets or coke since our Lorain, Ohio blast furnace
facility, which is our only facility that utilizes these materials, was idle during this period. There is a correlation between
the prices of scrap and iron ore and finished product prices, although the degree and timing of this correlation varies from time
to time, so we may not always be able to fully pass along scrap, iron ore and other raw material price increases to our customers.
Therefore, our ability to decrease our cost of sales as a percentage of net sales is largely dependent on increasing our productivity.
Our ability to control selling, general and administrative expenses, which do not correlate to net sales as closely as cost of
sales do, is a key element of our profitability. Although our revenues and costs fluctuate from quarter to quarter, we do not experience
large fluctuations due to seasonality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Production costs at our U.S. facilities
are higher than those in our facilities in Mexico principally due to the higher cost of labor and the higher cost of ferroalloys
used to manufacture SBQ steel, which is the only steel product that we produce in the United States.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Sales Volume, Price and Cost Data,
2009 - 2011</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Shipments (thousands of tons)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,040</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,241</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,289</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Guadalajara and Mexicali</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">544</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">563</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Apizaco and Cholula</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">347</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">284</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">343</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">San Luis facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">513</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">542</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">503</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Republic facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">636</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">845</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">880</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales (Ps. millions)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,232</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,576</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,270</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Guadalajara and Mexicali</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,686</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,173</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,953</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Apizaco and Cholula</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,956</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,025</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,096</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">San Luis facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,725</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,425</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,097</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Republic facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,953</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,124</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cost of sales (Ps. millions)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,624</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Guadalajara and Mexicali</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,352</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,601</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,878</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Apizaco and Cholula</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,309</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,067</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">San Luis facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,303</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,802</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,005</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Republic facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,025</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,538</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,674</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average price per ton (Ps.)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,427</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,967</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,787</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Guadalajara and Mexicali</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,614</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,075</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,574</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Apizaco and Cholula</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,519</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,651</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,942</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">San Luis facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,261</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,164</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,133</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Republic facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,366</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,050</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average cost per ton (Ps.)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,303</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,194</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Guadalajara and Mexicali</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,162</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,318</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,664</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Apizaco and Cholula</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,628</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,942</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">San Luis facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,439</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,015</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,962</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.2in">Republic facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,838</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,539</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our results are affected by general global
trends in the steel industry and by the economic conditions in the countries in which we operate and in other steel producing countries.
Our results are also affected by the specific performance of the automotive, non-residential construction, industrial equipment,
tooling equipment and other related industries. Our profitability is also impacted by events that affect the price and availability
of raw materials and energy inputs needed for our operations. The factors and trends discussed below also affect our results and
profitability.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our primary source of revenue is the sale of SBQ steel
and structural steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In August 2004, we completed the Atlax
Acquisition (Tlaxcala and Cholula facilities). In July 2005, we and our controlling shareholder, Industrias CH, completed the acquisition
of Republic. We believe that these acquisitions allowed us to become the leading producer of SBQ steel in North America and the
leading producer of structural and light structural steel in Mexico, in each case in terms of sales volume. We expect the sale
of SBQ steel, structural steel and other steel products to continue to be our primary source of revenue. The markets for our products
are highly competitive and highly dependent on developments in global markets for those products. The main competitive factors
are price, product quality and customer relationships and service.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our results are affected by economic activity, steel
consumption and end-market demand for steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our results of operations depend largely
on macroeconomic conditions in North America. Historically, there has been a strong correlation between the annual rate of steel
consumption and the annual change in gross domestic products (&ldquo;GDP&rdquo;) in the Mexican, U.S. and Canadian markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We sell our steel products to the automotive,
construction, manufacturing and other related industries. These industries are generally cyclical, and their demand for steel is
impacted by the stage of their industry market cycles and the country&rsquo;s economic performance. Mexico&rsquo;s GDP increased
3.9% in 2011 and increased 5.5% in 2010. The U.S. GDP increased 1.7% in 2011 and increased 3% in 2010. A deterioration in economic
conditions in the countries in which we operate is likely to adversely affect our results of operation.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our results are affected by international steel prices
and trends in the global steel industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Steel prices are generally set by reference
to world steel prices, which are determined by global supply and demand trends. As a result of general excess capacity in the industry,
the world steel industry was previously subject to substantial downward pricing pressure, which negatively impacted the results
of steel companies in the second half of 2000 and all of 2001. International steel prices generally improved beginning in 2003,
driven by a strong increase in global demand fostered by economic growth in Asia and an economic recovery in the United States,
combined with increased rationalization of production capacity in the United States and elsewhere. Average steel prices continued
to improve from 2003 to 2008 due to strong end-market demand fundamentals for a number of key steel-consuming industries, continued
strong steel demand in China, India and other developing economies, relatively high raw material and energy costs and reductions
in U.S. production from some of the industry&rsquo;s largest producers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">This period of high prices for steel
encouraged reactivation of investment in production capacity, and, consequently, an increase in the supply of steel products that
contributed to a decline in steel prices. As the 2008 financial crisis worsened in late 2008 and early 2009, global demand for
steel fell while new steel production capacity was coming into the market, and as a result steel prices fell worldwide. In 2009
the average steel price decreased approximately 22% compared to 2008. Due to an increase in the demand, in 2010, the average steel
price increased approximately 16% as compared to 2009. The average steel price increased approximately 17% in 2011 as compared
to 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In recent years, there has been a trend
toward consolidation of the steel industry. For example, in 2006, Arcelor completed the acquisition of Dofasco in Canada, and Mittal
Steel announced the acquisition of Arcelor, forming the largest steel company in the world. Aceralia, Arbed and Usinor merged in
February 2002 to create Arcelor, and LNM Holdings and Ispat International merged in October 2004 to create Mittal Steel, which
subsequently acquired International Steel Group. In addition, a number of other steel acquisition transactions have been announced,
including the acquisition of Oregon Steel by Evraz and the acquisition of Corus by Tata Steel. Consolidation has enabled steel
companies to lower their production costs and allowed for more stringent supply-side discipline, including through selective capacity
closures or idling, as the ones observed recently in the United States by Mittal Steel, U.S. Steel and others. Consolidation may
result in increased competition and could adversely affect our results.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our results are affected by competition from imports.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our ability to sell our products is influenced,
to varying degrees, by global trade for steel products, particularly trends in imports of steel products into the Mexican and U.S.
markets. During 2005, the Mexican government, at the request of CANACERO, implemented several measures to prevent unfair trade
practices such as dumping in the steel import market. These measures include initiating anti-dumping and countervailing duty proceedings,
temporarily increasing import tariffs for countries with which Mexico does not have free trade agreements. As a result, the competitive
price pressure from dumping declined, contributing to a general upward trend in domestic Mexican steel prices. In 2006 and 2007,
imports to Mexico increased as market conditions improved, and in 2008, imports to Mexico continued to increase, notwithstanding
the worsening of international market conditions. In 2009, however, imports to Mexico decreased as domestic and global market conditions
worsened. In 2010 and 2011, imports to Mexico increased as market conditions improved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Steel imports to the United States accounted
for an estimated 22% of the domestic U.S. steel market in 2011 and an estimated 21% in 2010. Foreign producers typically have lower
labor costs, and in some cases are owned, controlled or subsidized by their governments, allowing production and pricing decisions
to be influenced by political and economic policy considerations as well as prevailing market conditions. Increases in future levels
of imported steel in the United States could reduce future market prices and demand levels for steel in the United States. To this
extent, the U.S. Department of Commerce and the U.S. International Trade Commission are currently conducting five year &ldquo;sunset&rdquo;
reviews of existing trade relief in several different steel products. Imports represent less of a threat to SBQ producers like
us in the United States than to commodity steel producers because of the high quality requirements and standard required by buyers
of SBQ steel products.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our results are affected by the cost of raw materials
and energy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We purchase substantial quantities of
raw materials, including scrap metal, iron ore, coke and ferroalloys for use in the production of our steel products. The availability
and price of these inputs vary according to general market and economic conditions and thus are influenced by industry cycles.
As a result of the 2008 financial crisis that continues to affect the international markets, the prices of these inputs have remained
highly volatile. For example, prices of scrap metal decreased approximately 24% in 2009, increased approximately 34% in 2010 and
increased approximately 21% in 2011; and prices of ferroalloys decreased approximately 43% in 2009, increased approximately 22%
in 2010 and 10% in 2011. As with other raw materials, iron ore and coke prices fluctuate significantly. However, in 2009, 2010
and 2011 we did not purchase coke or pellets since our Lorain, Ohio blast furnace facility was idle during this period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition to raw materials, electricity
and natural gas are both relevant components of our cost structure. We purchase electricity and natural gas at prevailing market
prices in Mexico and the United States. These prices are impacted by general demand and supply for energy in the United States
and Mexico and increased significantly in 2008 as economic activity fueled energy demand and the supply and price of oil was impacted
by geopolitical events. While natural gas and electricity prices in the United States and Mexico decreased during the fourth quarter
of 2008 in response to the financial crisis, they have remained highly volatile. Prices for electricity increased approximately
17% in 2009, 8% in 2010 and 11% in 2011; and prices for natural gas decreased approximately 10% in 2009, 18% in 2010 and 14% in
2011.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">If inflation rates in Mexico rise significantly, our
costs may increase and the demand for our services may decrease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexico has historically experienced high
annual rates of inflation. The annual rate of inflation, as measured by changes in the Mexican national consumer price index (<I>&Iacute;ndice
Nacional de Precios al Consumidor</I>) published by the Mexican Central Bank (Banco de Mexico) was 3.6% for 2009, 4.4% for 2010
and 3.8% for 2011. High inflation rates could adversely affect our business and results of operations by increasing certain costs,
such as the labor costs of our Mexican facilities, beyond levels that we could pass on to our customers and reducing consumer purchasing
power, thereby adversely affecting demand for our products.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Depreciation of the Mexican peso relative to the U.S.
dollar, as well as the reinstatement of exchange controls and restrictions, could adversely affect our financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Depreciation of the Mexican peso relative
to the U.S. dollar may negatively affect our results of operations. Since the second half of 2008, the value of the Mexican peso
relative to the U.S. dollar has fluctuated significantly. According to the Mexican Central Bank (Banco de Mexico), during this
period the exchange rate registered a low of Ps. 9.92 per US$1.00 at August 6, 2008, and a high of Ps. 15.37 per US$1.00 at March
10, 2009 and was Ps. 12.99 per US$1.00 at April 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A severe depreciation of the Mexican
peso may also result in disruption of the international foreign exchange markets and may limit our ability to convert Mexican pesos
into U.S. dollars and other currencies. While the Mexican government does not currently restrict, and has not recently restricted
the right or ability of Mexican or foreign persons or entities to convert Mexican pesos into U.S. dollars or to transfer other
currencies out of Mexico, it has done so in the past and could reinstate exchange controls and restrictions in the future. Currency
fluctuations or restrictions on the transfer of foreign currency outside of Mexico may have an adverse effect on our financial
performance.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Segment Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are required to disclose segment information
in accordance with MFRS B-5 Segment: Information which establishes standards for reporting information about operating segments
in annual financial statements and requires reporting of selected information about operating segments in interim financial reports
issued to shareholders. Operating segments are components of a company about which separate financial information is available
that is regularly evaluated by the chief operating decision maker(s) in deciding how to allocate resources and assess performance.
The statement also establishes standards for related disclosures about a company&rsquo;s products and services, geographical areas
and major customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We conduct business in two principal
business segments which are organized on a geographical basis:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our Mexican segment represents the results of our operations in Mexico, including our plants in Mexicali, Guadalajara, Tlaxcala
and San Luis Potos&iacute;; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our U.S. segment represents the results of our operations of Republic, including its eight plants of which seven are located
in the United States and one is located in Canada.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following information shows other
results by segment.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the year ended December 31, 2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net Sales</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">15,174,922</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">14,127,627</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(32,051</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">29,270,498</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Cost of Sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12,032,028</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,624,635</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(32,051</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,624,612</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,142,894</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">502,992</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,645,886</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">General and administrative expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">722,591</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">331,561</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,054,152</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating (loss) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,420,303</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171,431</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,591,734</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(103,670</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,036</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(113,706</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Financial income (expenses), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,177</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,410</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Exchange gain, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">581,630</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">581,630</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before income tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,914,850</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,218</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,062,068</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Income tax</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">143,034</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(33,197</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">109,837</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,771,816</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">180,415</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,952,231</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Other Data</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total Assets</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">23,497,561</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">9,098,293</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(1,326,388</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">31,269,466</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and Amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">777,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">223,981</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,001,098</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Additions of property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">267,720</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,280</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">432,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,485,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,841,686</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,326,388</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,000,643</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the year ended December 31, 2010</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net Sales</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">12,623,536</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">11,952,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">24,576,436</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Cost of Sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,328,758</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,920,745</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">22,249,503</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,294,778</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,155</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,326,933</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<!-- Field: Page; Sequence: 55; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; padding-bottom: 12pt; border-bottom: Black 4px solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->50<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the year ended December 31, 2010</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in; width: 40%">General and administrative expenses</TD><TD STYLE="padding-bottom: 1pt; width: 3%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; width: 10%">803,684</TD><TD STYLE="padding-bottom: 1pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; width: 3%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; width: 10%">348,284</TD><TD STYLE="padding-bottom: 1pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; width: 3%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; width: 10%">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; width: 3%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; width: 10%">1,151,968</TD><TD STYLE="padding-bottom: 1pt; text-align: left; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating (loss) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,491,094</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(316,129</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,174,965</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(124,126</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(61,952</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(186,078</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Financial income (expenses), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,449</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,706</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(257</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Exchange loss, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(207,240</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(207,240</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before income tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,176,177</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(394,787</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">781,390</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Income tax</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(31,785</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">144,221</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">112,436</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,207,962</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(539,008</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">668,954</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">Other Data</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total Assets</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">20,506,648</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">7,830,653</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(988,333</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">27,348,968</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and Amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">859,601</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">238,607</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,098,208</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Additions of property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">434,910</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,451</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">496,361</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,479,167</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,239,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(988,333</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,730,543</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the year ended December 31, 2009</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net Sales</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">11,366,780</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">7,864,749</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">19,231,529</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Cost of Sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,951,396</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,028,087</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,979,483</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,415,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,163,338</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">252,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">General and administrative expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">582,226</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">521,859</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,104,085</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating (loss) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,833,158</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,685,197</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(852,039</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other (expense) income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">70,102</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,111</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,991</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Impairment of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,368,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,368,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Financial income (expenses), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,726</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(39,595</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,869</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Exchange loss, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(78,429</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(78,429</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before income tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(521,443</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,764,903</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,286,346</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Income tax</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,065,363</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(999,789</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,065,152</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">543,920</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,765,114</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,221,194</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">Other Data</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexico</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">United States</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operations between Segments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total Assets</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">19,540,570</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">8,663,405</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(1,298,164</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">26,905,811</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and Amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">783,414</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">264,468</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,047,882</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Additions of property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">176,249</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">86,958</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">263,207</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,596,802</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,528,620</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,298,164</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,827,258</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our net sales by country or region during
2009, 2010 and 2011 are as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Sales</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center">(in thousand of Pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-indent: -0.1in; padding-left: 0.1in">Mexico</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">10,685,259</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">10,799,739</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">14,399,682</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">USA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,829,024</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,078,357</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,709,807</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Canada</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">502,286</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">470,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">766,318</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Latin America</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135,965</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">221,192</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">356,932</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Other (Europe and Asia)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,995</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,505</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">37,759</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,231,529</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">24,576,436</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">29,270,498</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2010 and 2011</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Net Sales</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Net sales increased 19%, to Ps. 29,270
million in 2011 compared to Ps. 24,576 million in 2010. This increase resulted principally from (i) the combination of higher sales
of SBQ; (ii) a 2% increase in shipments of finished steel products; and (iii) a 17% increase in the average price per ton of steel
products. Total sales outside of Mexico increased 8%, to Ps. 14,871 million in 2011 compared with Ps. 13,777 million in the same
period of 2010. Total sales in Mexico increased 33%, from Ps. 10,799 million in 2010 to Ps. 14,399 million in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
increased 2%, to 2.289 million tons in 2011, as compared to 2.241 million tons in 2010. Total sales volume outside of Mexico of
finished steel products was 1.014 million tons in 2011, as compared to 1.016 million tons in 2010, while total Mexican sales increased
4%, from 1.225 million tons in 2010, as compared to 1.275 million tons in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The average price of steel products increased
17% in 2011 compared to 2010, mainly as a result of an increase in sales of SBQ and higher prices in worldwide steel markets.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Cost of Sales</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our cost of sales increased 15%, from
Ps. 22,250 million in 2010 to Ps. 25,624 million in 2011, which increase is mainly attributable to (i) an 11% increase in the average
cost of raw materials used to produce finished steel products; (ii) higher SBQ sales; and (iii) a 2% increase in shipments. Cost
of sales as a percentage of net sales was 88% in 2011, as compared to 91% in 2010. We experienced higher cost of sales at our Republic
facilities, mainly a result of (i) higher labor costs corresponding to our U.S. operations, and (ii) the higher cost of raw materials,
which our U.S. operations use in the production of SBQ steel. Hourly wages at our Mexican operations were approximately U.S.$1.9
and U.S.$1.8 per hour in 2011 and 2010, respectively, compared to U.S.$46 and U.S.$47 per hour for 2011 and 2010, respectively,
at our U.S. operations. Although raw material costs are similar in the United States and Mexico, our U.S. operations produce only
the more costly SBQ steel, which requires more expensive raw materials such as chromium, nickel, molybdenum and other alloys. Our
Mexican operations require these alloys to a lesser extent, because they produce commodity steel as well as SBQ steel.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Gross Profit</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our gross profit increased 57%, to Ps.
3,646 million in 2011 as compared to Ps. 2,326 million in 2010. This increase attributable to (i) an increase in volumes shipped;
and (ii) the use of a more efficient better blend of steel components. As a percentage of net sales, our gross profit was 12% in
2011, as compared to 9% in 2010.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">General and Administrative Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our general and administrative expenses
(including depreciation and amortization) decreased 9%, to Ps. 1,054 million in 2011, as compared to Ps. 1,152 million in 2010.
In 2010 and 2011, our general and administrative</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">expenses
included Ps. 359 million of amortization of the tangible and intangible assets registered in connection with the acquisition of
Grupo San.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Operating expenses as a percentage of
net sales were 4% in 2011, as compared to 5% in 2010, mainly attributable to a decrease of Ps. 98 million, or 18%, in depreciation
and amortization expense, to Ps. 455 million in 2011, from Ps. 553 million in 2010.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Operating Income (Loss)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Operating income was Ps. 2,592 million
in 2011, as compared to Ps. 1,174 million in 2010. Operating income represented 9% of our net sales in 2011, as compared to 5%
of our net sales in 2010. The increase in operating income is mainly attributable to (i) an increase in shipments; (ii) an increase
in sales of SBQ; and (iii) an increase in average sales prices per ton.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other (Expense) Income, Net</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expenses, net of Ps.
114 million in 2011, reflecting (i) an expense of Ps. 49 million related to the cancellation of account balances from previous
years; (ii) expenses of Ps. 14 million corresponding to land remediation work at Pacific Steel; and (iii) expenses of Ps. 12 million
related to obsolete machinery; and (iv) other expenses related to other financial operations of Ps. 39 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expenses, net of Ps.
186 million in 2010. This amount reflected (i) an expense of Ps. 117 million related to the acquisition of Lipa Capital, LLC; (ii)
an expense relating to an adjustment for depreciation of Ps. 28 million corresponding to previous years; and (iii) other expenses
related to other financial operations of Ps. 41 million.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comprehensive Financing (Income) Cost</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a comprehensive financing
income of Ps. 584 million in 2011, as compared to Ps. 207 million in 2010. Financial income or expense reflects the sum of interest
expense (net) and foreign exchange (net). We recorded a foreign exchange gain of approximately Ps. 582 million in 2011, as compared
to a foreign exchange loss of approximately Ps. 207 million in 2010, mainly attributable to (i) the decrease of 13% in the value
of the peso versus the dollar in 2011 and (ii) a 5% increase in the value of the peso versus the U.S. dollar in 2010. Our interest
gain, net was Ps. 2 million in 2011, as compared to an interest expense, net of Ps. 257 thousand in 2010.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Income Tax</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011 we recorded an income tax provision
of Ps. 110 million, which included an income tax benefit of Ps. 87 million and an income tax provision for deferred income taxes
of Ps. 197 million. In 2010 we recorded an income tax provision of Ps. 112 million which included an income tax benefit for deferred
income taxes of Ps. 47 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our effective income tax rates for 2011
and 2010 were 3.6% and 14.4%, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 7, 2009, a tax reform bill
was approved and published in Mexico for the 2010 fiscal year, which reforms and amends certain tax regulations. This reform came
into effect as of January 1, 2010 and enacts an income tax rate increase of: 30% for 2010, 2011 and 2012; 29% for 2013; and 28%
for 2014 and thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Flat-Rate Business Tax (FRBT) Law
was published in the <I>Official Gazette </I>on October 1, 2007. This Law came into force on January 1, 2008, and abolished the
Asset Tax Law. In 2010 FRBT is computed by applying the 17.5% rate (17% for 2009 and 16.5% for 2008) to income determined on the
basis of cash flows, net of authorized credits. FRBT is payable only to the extent it exceeds income tax for the same period. In
other words, to determine FRBT payable, income tax paid in a given period must first be subtracted from the FRBT for the same period
and the difference shall be the FRBT payable. The deferred taxes of the exercise where determined based on the specific rules of
each tax.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Net Income (Loss)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded net income of Ps. 2,952 million
in 2011, as compared to net income of Ps. 669 million in 2010. This increase is mainly attributable to (i) an increase in shipments,
(ii) an increase in sales of SBQ, (iii) an increase in average sales prices per ton and (iv) an increase in comprehensive financing
income.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2009 and 2010</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Net Sales</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Net sales increased 28%, to Ps. 24,576
million in 2010 as compared to Ps. 19,232 million in 2009. This increase was mainly attributable to (i) an increase in shipments
and (ii) an increase in the average price of steel products. Total sales outside of Mexico increased 61%, to Ps. 13,777 million
in 2010 as compared to Ps. 8,546 millions in 2009. Total sales in Mexico increased 1%, from Ps. 10,685 million in 2009, to Ps.
10,799 million in 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
increased 10%, to 2.241 million tons in 2010, as compared to 2.040 million tons in 2009. Total sales outside of Mexico of finished
steel products increased 35%, to 1.016 million tons in 2010, as compared to 755 thousand tons in 2009, while total Mexican sales
decreased 5%, from 1.285 million tons in 2009 to 1.225 million tons in 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The average price of steel products increased
16% in 2010 compared to 2009, as a result of higher prices prevailing in worldwide steel markets.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Cost of Sales</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our cost of sales increased 17%, from
Ps. 18,980 million in 2009 to Ps. 22,250 million in 2010. Cost of sales as a percentage of net sales was 91% in 2010, as compared
to 99% in 2009. The increase in the cost of sales in 2010 is mainly attributable to (i) an increase of 9% in the average cost of
raw materials used to produce steel products resulting from increased scrap metal and certain other raw material prices, (ii) a
10% increase in shipments, and (iii) higher (direct) cost of sales at our Republic facilities, mainly a result of higher labor
costs in the U.S. operations and the higher raw materials costs associated with the production of SBQ steel. Average hourly wages
at our Mexican operations in 2010 and 2009 were approximately U.S.$1.8 and U.S.$2.5 per hour, respectively, while average hourly
wages in our U.S. operations in 2010 and 2009 were more than U.S.$47 and U.S.$53 per hour, respectively. Although raw material
costs are similar in the United States and Mexico, our U.S. operations produce only the more costly SBQ steel, which requires more
expensive raw materials such as chromium, nickel, molybdenum and other alloys. Our Mexican operations require these alloys to a
lesser extent, because they produce commodity steel as well as SBQ steel.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Gross Profit</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our gross profit increased 823%, to Ps.
2,326 million in 2010 as compared to Ps. 252 million in 2009, which increase was primarily due to (i) an increase of 16% in the
average price per ton of steel products, and (ii) an increase of 10% in sales volume. As a percentage of net sales, our gross profit
was 9% in 2010, as compared to 1% in 2009.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">General and Administrative Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our general and administrative expenses
(including depreciation and amortization) increased 4 %, to Ps. 1,152 million in 2010, from Ps. 1,104 million in 2009. In 2009
and 2010, our general and administrative expenses included Ps. 359 million of amortization of the tangible and intangible assets
registered in connection with the acquisition of Grupo San.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Operating expenses as a percentage of
net sales represented 5% in 2010, as compared to 6% in 2009, mainly attributable to (i) increased operations at our Republic facilities,
which has higher operational expenses as</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">compared
to our other facilities; and (ii) an increase of Ps. 46 million, or 9%, in depreciation and amortization expenses, to Ps. 553
million in 2010 from Ps. 507 million in 2009.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Operating Income (Loss)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Operating income was Ps. 1,174 million
in 2010, as compared to an operating loss of Ps. 852 million in 2009. Operating income represented 5% of our net sales in 2010.
Operating income in 2010 was principally driven by (i) a 16% increase in the average price per ton of steel products and (ii) a
10% increase in shipments.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other (Expense) Income, Net</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expenses, net of Ps.
186 million in 2010, reflecting (i) an expense of Ps. 117 million related to the acquisition of Lipa Capital, LLC; (ii) an expense
relating to an adjustment for depreciation of Ps. 28 million corresponding to previous years; and (iii) other expenses related
to other financial operations of Ps. 41 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other income, net, of Ps.
30 million in 2009, reflecting (i) an expense of Ps. 7 million for employee profit sharing; and (ii) other income of Ps. 37 million
from returns of tax from investment in new projects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in"><I>Impairment of Intangible Assets</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2009, we recognized an impairment
of Ps. 2,368 million, which diminished the value of the goodwill of Grupo San and the trademark &ldquo;San 42&rdquo; in an amount
of Ps. 2,352 million and Ps. 16 million, respectively.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comprehensive Financing (Income) Cost</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a comprehensive financing
cost of Ps. 207 million in 2010, as compared to a comprehensive financing cost of Ps. 97 million in 2009. Financial income or expense
reflects the sum of interest expense (net) and foreign exchange (net). We recorded a foreign exchange loss of approximately Ps.
207 million in 2010, as compared to a foreign exchange loss of Ps. 79 million in 2009, reflecting 5% and 4% increases, respectively,
in the value of the peso versus the U.S. dollar in 2010 and 2009, respectively. Our interest expense, net was Ps. 257 thousand
in 2010, as compared to our interest expense, net of Ps. 18 million in 2009.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Income Tax</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2010 we recorded an income tax provision
of Ps. 112 million, which included an income tax benefit for deferred income taxes of Ps. 47 million. In 2009, we recorded an income
tax benefit of Ps. 2,065 million, attributable to the loss before taxes incurred by the company and the reversal of the additional
tax liability from other tax transactions of Ps. 1,143 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our effective income tax rates for 2010
and 2009 were 14.4%, and (62.8%) respectively. The effective income tax rate for 2009 increased as a result of the income tax benefits
recorded by the company attributable to the loss before taxes and the reversal of the additional tax liability from other tax transactions,
as discussed above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 7, 2009, a tax reform bill
was approved and published in Mexico for the 2010 fiscal year, which reforms and amends certain tax regulations. This reform came
into effect as of January 1, 2010 and enacts an income tax rate increase of: 30% for 2010, 2011 and 2012; 29% for 2013; and 28%
for 2014 and thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Flat-Rate Business Tax (FRBT) Law
was published in the <I>Official Gazette </I>on October 1, 2007. This Law came into force on January 1, 2008, and abolished the
Asset Tax Law. In 2010 FRBT is computed by applying the 17.5% rate (17% for 2009 and 16.5% for 2008) to income determined on the
basis of cash flows, net of authorized credits. FRBT is payable only to the extent it exceeds income tax for the same period. In
other words, to determine FRBT payable, income tax paid in a given period must first be subtracted from the FRBT for the same period
and the difference shall be the FRBT payable. The deferred taxes of the exercise where determined based on the specific rules of
each tax.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Net Income (Loss)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded net income of Ps. 669 million
in 2010, as compared to a net loss of Ps. 1,221 million in 2009. We attribute the income in 2010 to (i) a 16% increase in the average
price per ton of steel products and (ii) a 10% increase in sales volumes. We attribute the loss in 2009 to the impact of lower
sales due to the economic recession, particularly in the automotive and construction industries and the impairment of assets.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Critical Accounting Policies</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The discussion in this section is based
upon our financial statements, which have been prepared in accordance with MFRS. The preparation of these financial statements
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities at year-end, and the reported amount of revenues and expenses during the year. Management
regularly evaluates these estimates, including those related to the carrying value of property, plant and equipment and other non-current
assets, inventories and cost of sales, income taxes, foreign currency transactions and exchange differences, valuation allowances
for receivables, inventories and deferred income tax assets, liabilities for deferred income taxes, valuation of financial instruments,
obligations relating to employee benefits, potential tax deficiencies, environmental obligations, and potential litigation claims
and settlements. Management estimates are based on historical experience and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Accordingly, actual results may differ materially from current
expectations under different assumptions or conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Management believes that the critical
accounting policies which require the most significant judgments and estimates used in the preparation of the financial statements
relate to deferred income taxes, the impairment of property, plant and equipment, impairment of intangible assets, valuation allowance
on accounts receivable and inventories obsolescence. We evaluate the recoverability of deferred income tax assets, including those
for net operating loss (NOL) carry forwards, whether the probability of not recovering all or a portion of them was more likely
than not. The final realization of deferred tax assets depends on the generation of taxable profits in the periods when the temporary
differences are deductible. Upon carrying out this evaluation, we considered the expected reversal of deferred tax liabilities,
projected taxable profit and planning strategies. As part of our analysis, we also considered the impact of Mexico&rsquo;s Flat-Rate
Business Tax in the projected utilization of NOLs to determine which tax system (the regular income tax or the Flat Rate Business
Tax) would be more likely to limit the realization of deferred tax assets. To the extent that the Flat Rate did not limit recognition
of deferred tax assets, we projected future taxable profits for a period of four years. Based on the company&rsquo;s evaluation,
it determined the amount of deferred tax asset that is more likely than not to be realized in the future against those taxable
profits, and records an allowance for the deferred tax asset amount that it does not expect to recover in the future. Any deferred
tax amounts which were not recovered in that time period or through the reversal of deferred tax liabilities had a valuation allowance
provided for their realization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We evaluate periodically the adjusted
values of our property, plant and equipment and intangible assets to determine whether there is an indication of potential impairment.
Impairment exists when the carrying amount of an asset exceeds net cash flow expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset
exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or realizable value. Significant
judgment is involved in estimating future revenues and cash flows or realizable value, as applicable, of our property, plant and
equipment due to the characteristics of those assets. The class of our assets which most require complex determinations based upon
assumptions and estimates relates to indefinite lived intangibles including goodwill, due to the current market environment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In assessing the recoverability of the
goodwill and other intangibles, we must make assumptions regarding estimate future cash flows and other factors to determine the
fair value of the respective assets. We perform an annual review in the fourth quarter of each year, or more frequently if indicators
of potential impairment exist, to determine if the carrying value of recorded goodwill is impaired. The impairment review process
compares the fair value of the reporting unit in which goodwill resides to its carrying value. We estimate the reporting unit&rsquo;s
fair value</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">based on
a discounted future cash flow approach that requires estimating income from operations. In order to estimate our cash flows used
in impairment computations, we considered the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our history of earnings;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our history of capital expenditures;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the remaining useful lives of our primary assets;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>current and expected market and operating conditions; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our weighted average cost of capital.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under U.S. GAAP, if the carrying amount
of the reporting units exceeds its related fair value, we should apply a &ldquo;second step&rdquo; process by means of which the
fair value of such reporting unit should be allocated to the fair value of our net assets in order to determine the reporting unit&rsquo;s
&ldquo;implied&rdquo; goodwill. The resulting impairment loss under U.S. GAAP is the difference between the carrying amount of
the related goodwill as of the valuation date and the implied goodwill amount. As of December 31, 2009, the implied goodwill under
the second step process was Ps. 1,916 million, resulting in a U.S. GAAP reconciliation adjustment of Ps. 102 million. Additionally,
we reconcile the aggregate fair value of the reporting units to our market capitalization. Our market capitalization as of December
31, 2009 indicates an implied control premium of approximately 25%. This implied control premium is consistent with recent observed
control premiums. Assumptions used in the analysis considered the current market conditions in developing short- and long-term
growth expectations. In 2010, we recorded and expense of Ps. 102 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Other intangible assets are mainly comprised
of trademarks, customer list and non-competition agreements. When impairment indicators exist, or at least annually for indefinite
live intangibles, we determine our projected revenue streams over the estimated useful life of the asset. In order to obtain undiscounted
and discounted cash flows attributable to each intangible asset, such revenues are adjusted for operating expenses, changes in
working capital and other expenditures as applicable, and discounted to net present value using the risk adjusted discount rates
of return. As of December 31, 2010 and 2011 there was not impairment charge to other intangible assets, while in 2009 there was
an impairment charge related to other intangible assets of Ps. 16 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As a result of the downturn in the construction
industry in Mexico during 2009 and the negative impact the downturn had on our operations mainly at the San Luis facilities, in
which goodwill resides we adjusted the key assumptions used in the valuation model. As of December 31, 2010 and 2011, there was
no impairment charge related to the San Luis facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of December 31, 2011, the main key
assumptions used in the valuation models of San Luis reporting unit are as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>discount rate: 10.9%; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>sales: we estimate an increase in sales, mainly attributable to the increase in the volume by the mesh products. The company
forecast an increase of 10% in 2012 and 1.7% for 2013. After 2014, no sales increases in volume terms are considered in the valuation
model and the useful remaining life of the assets we keep the volume and sales prices.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of December 31, 2010, the main key
assumptions used in the valuation models of San Luis reporting unit are as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>discount rate: 11.8%; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>sales: we estimate sales will start a recovery in the years 2011, 2012, 2013 and 2014. After 2014, no sales increases in volume
terms are considered in the valuation model.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">If these estimates or their related assumptions
for prices and demand change in the future, we may be required to record additional impairment charges for these assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">With respect to valuation allowance on
accounts receivable, on a periodic basis management analyzes the recoverability of accounts receivable in order to determine if,
due to credit risk or other factors, some receivables may not be collected. If management determines that such a situation exists,
the book value of the non-recoverable assets is adjusted and charged to the income statement through an increase in the doubtful
accounts allowance. This determination requires substantial judgment by management. As a result, final losses from doubtful accounts
could differ significantly from estimated allowances.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">New Accounting Pronouncements</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Adoption of International Financial Reporting
Standards (IFRS)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Securities Commission (CNBV)
has established the requirement that certain listed companies must disclose their financial information to the public, through
the Mexican Stock Exchange (BMV), and that, beginning in 2012, must prepare their financial information in accordance with International
Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Financial Statements to be issued
by the Company for the year ending December 31, 2012 will be its first annual financial statements comply with IFRS. The translation
date is January 1, 2012 and therefore, the year ended December 31, 2011 will be the comparative period covered by the standard
of adoption IFRS 1, &ldquo;Initial Adoption of International Financial Reporting Standards&rdquo;. According to IFRS 1 the Company
will apply the relevant mandatory exceptions and certain optional exemption to retrospective application of IFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mandatory exceptions - The Company will
apply the following mandatory exceptions with respect to the retrospective application of IFRS:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Calculation of Estimates - Estimates
on the date of transition are consistent with the estimates on such date under MFRS, unless there is evidence of error in such
estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Hedge accounting &ndash; The Company
will apply hedge accounting only if the hedging relationship meets the criteria set out under IFRS at the transition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Non-controlling interest &ndash; The
Company will apply prospectively certain recognition and presentation requirements related to non-controlling interest, from the
date of transition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, the Company believes that
the mandatory exception &ldquo;Disposal and transfer of assets and liabilities&rdquo; will have no effect on its financial statements
as of the date of transition to IFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Optional Exemptions - The Company has
elected the following optional exemptions to retrospective application of IFRS:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Business combinations &ndash; The Company
will apply the exemption to business combinations, but only to the extent that such business combinations occur after the transition
date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Deemed Cost - We will use the revalued
amount under MFRS at the transition date as the cost incurred for the item of property, plant and equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Employee benefits &ndash; We will recognize
all cumulative actuarial gains and losses at the transition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Cumulative differences for the effect
of conversion - the exemption will apply cumulative differences for the effect of conversion from MFRS to IFRS, effective at the
transition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Borrowing Costs - The Company will apply
the transitional provisions of IAS 23, Borrowing Costs. Therefore, the Company designated the transition date as the starting date
for capitalization of borrowing costs relating to qualifying assets, and will not retroactively restate the capitalization recorded
pursuant to MFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Main Differences - The following summarizes
the main differences that we have identified with respect to the transition from MFRS to IFRS and an estimate of significant impacts:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Effects of inflation - Under IFRS, the
effects of inflation are recognized in the financial statements when the economy of the currency used by the company is considered
to be experiencing hyperinflation. The Mexican economy ceased to be hyperinflationary as from 1999 and, consequently, inflationary
effects that were recognized by the company until December 31, 2007 under MFRS will be reversed, which is expected to lead to an
increase in retained earnings of approximately Ps. 1,364,782 on the date of transition, which correspond primarily to the effects
of inflation recognized in contributed capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Components - According to IFRS, the company
will determine the significant components of property, plant and equipment, and consequently readjust their useful lives and the
corresponding effect thereof on the accumulated depreciation, which is expected to represent a decrease to retained earnings of
approximately Ps. 164.906 on the date of transition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Employee Benefits - Under IFRS, provisions
for severance labor are recognized until the company has a demonstrable commitment to end the relationship with the employee or
has made an offer encouraging voluntary redundancy which will remove a liability recognized under MFRS of Ps. 10,750 on the transition
date. Additionally, provisions for retirement are recalculated to recognize the cost of past service, which will entail the recognition
of an additional liability of Ps. 24,550.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Deferred taxes - Under IFRS, deferred
taxes will be recalculated based upon the adjusted book values of assets and liabilities under IFRS, which will result in an increase
to retained earnings of approximately Ps. 79.582 on the transition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Other differences in presentation and
disclosures in the financial statements - Generally, the disclosure requirements of IFRS are broader than those of MFRS, which
can result in increased disclosures about accounting policies, significant judgments and estimates, financial instruments and management
risks, among others. In addition, there may be differences in presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Stockholders&rsquo; equity - changes
previously described will increase stockholders&rsquo; equity and retained earnings as of the date of transition as shown below
(in thousands of pesos):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Impact in Equity</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Impact in Retained Earnings</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Employee benefits (actuarial gains and losses)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;Ps.</TD><TD STYLE="text-align: right">(3,520</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;Ps.</TD><TD STYLE="text-align: right">(3,520</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">Translation effect in foreign subsidiaries</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: right">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">406,513</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Inflation effects on stockholders&rsquo; accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">1,364,782</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Components and parts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(164,906</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">(164,906</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Employee benefits (providing compensation)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">10,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Employee benefits (past service cost)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(24,550</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">(24,550</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Deferred taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">79,582</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">79,582</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Total adjustment (decrease) increase</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 2.5pt double">&nbsp;Ps.</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">(102,644</P></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 2.5pt double; text-align: right">&nbsp;Ps.</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">1,668,651</P></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in">The information presented above has been
prepared in accordance with the standards and interpretations issued and outstanding or issued and adopted as of the date of preparation
of our consolidated financial statements for the year ended December 31, 2011. The standards and interpretations that are applicable
to December 31, 2012, including those that will be applicable on an optional basis, are not known with certainty. Additionally,
the accounting policies selected by the company may be modified as a result of changes in economic or industry trends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, IASB has issued amendments
to IFRS, which were enacted but not yet effective:</P>

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    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt">Disclosure - Transfers of financial assets</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IFRS 9 (amended 2010)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Financial Instruments</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IFRS 10</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Consolidated Financial Statements</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IFRS 11</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Joint Arrangements</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IFRS 12</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Disclosure of investments in other entities</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IFRS 13</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Fair value measurements</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Amendments to IAS 1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Presentation of other comprehensive income items</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Amendments to IAS 12</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Deferred tax - recovery of underlying assets</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IAS 27 (revised 2011)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Financial Statements</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">IAS 28 (revised 2011)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Investments in associates</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The company believes that adoption of
these accounting pronouncements will not represent a significant effect on financial reporting.</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Liquidity and Capital Resources</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As a result of the economic crisis in
Mexico arising from the devaluation of the peso versus the U.S. dollar in 1994, including the liquidity crisis which affected the
Mexican banking system, the insolvency of our former parent, Sidek, and our high levels of short-term indebtedness, we became unable
to generate or borrow funds to refinance our debt or to support our operations and capital improvements. As of December 15, 1997,
and immediately prior to the consummation of the restructuring discussed below, we had total outstanding indebtedness of approximately
U.S.$322 million. Over half of our debt had matured and was unpaid and substantially all of the balance was subject to acceleration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In December 1997, we consummated a corporate
reorganization and restructuring of our liabilities. As part of this restructuring, our wholly-owned subsidiary, CSG, incurred
new bank debt and issued new debt securities and paid limited amounts of accrued interest on certain outstanding debt in exchange
for and in an aggregate amount approximately equal to our aggregate outstanding consolidated debt at the date of consummation of
the restructuring. In exchange, CSG received equity in all of our subsidiaries, and we eliminated the intercompany debt that CSG
owed to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The restructuring did not result in a
reduction in the overall amount of our consolidated outstanding debt, and, accordingly, following the restructuring, through CSG,
we continued be highly leveraged. In 2001, subsequent to Industrias CH&rsquo;s acquisition of a controlling interest in us, CSG
redeemed or repurchased all of the outstanding debt securities it had issued in connection with the restructuring, which it financed
principally with borrowings from Industrias CH. In 2001, we converted approximately U.S.$90 million of bank debt to equity, which
equity Industrias CH acquired. From 2001 through 2004, CSG continued to pay down its outstanding bank debt, making scheduled amortization
payments as well as additional principal payments which it financed primarily by capital contributions from Industrias CH or borrowings
from Industrias CH which it later converted to equity. In March 2004, we prepaid U.S.$1.7 million of the remainder of our outstanding
bank debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 31, 2009, 2010 and 2011,
our total consolidated debt was U.S.$302,000 of 8 7/8% medium-term notes (&ldquo;MTNs&rdquo;) due 1998 which remained outstanding
after we conducted exchange offers for the MTNs in October 1997 and August of 1998. We could not identify the holders of such MTNs
at the time of the exchange offers and as a result such MTNs, which matured in 1998, have not been paid and remain outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On September 6, 2006, Industrias CH and
its subsidiaries and affiliates made available a line of credit in favor of Republic. Effective January 1, 2009, Industrias CH
reduced the interest rate from 5.23% to 0.25% per annum. As of December 31, 2011 and 2010, Republic had U.S.$50 million and U.S.$48.3
million, respectively, outstanding under this line of credit. See Note 6 to our consolidated financial statements included elsewhere
herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 30, 2008, we acquired 100% of
the stock of Grupo San for approximately U.S.$844 million (Ps. 8,730 million). To finance the purchase price, on May 29, 2008 we
accepted a loan from Banco Inbursa S.A. for U.S.$120 million (Ps. 1,325 million) at Libor + 1.45% that was due on May 29, 2009,
which debt has since been repaid in full. We also received U.S.$112.5 million (Ps. 1,169 million) of capital stock increase from
Industrias CH</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">that was
formalized on July 22, 2008. We paid the remaining balance of the purchase price through our own cash reserves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We depend heavily on cash generated from
operations as our principal source of liquidity. Other sources of liquidity have included financing made available to us by our
parent Industrias CH (primarily in the form of equity or debt, substantially all of which was subsequently converted to equity),
primarily for the purpose of repaying third party indebtedness, as well as limited amounts of vendor financing. On February 8,
2007, we completed a public offering of ADSs and series B shares and raised cash proceeds of approximately U.S.$214 million. As
of December 31, 2009, we had cash and cash equivalents of Ps. 1,948 million, as of December 31, 2010 we had cash and cash equivalents
of Ps. 3,385 million and as of December 31, 2011 we had cash and cash equivalents of Ps. 6,537 million. We believe that this amount
and cash generated from operations will be sufficient to satisfy our currently anticipated cash requirements, including our currently
anticipated capital expenditures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our principal use of cash has generally
been to fund our operating activities, for debt repayments, to acquire businesses and, to a significantly lesser degree, capital
expenditure programs. The following is a summary of cash flows for the three years ended December 31, 2009, 2010 and 2011:</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Principal Cash Flows</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center">(in millions of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; text-align: left; padding-left: 5.4pt">Funds provided by operating activities</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">1,159</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,344</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,954</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Funds used in investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(256</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(693</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(466</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Funds provided (used) by financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">469</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(126</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our net funds provided by operations
were Ps. 2,954 million in 2011, Ps. 2,344 million in 2010, and Ps. 1,159 million in 2009. The increase of Ps 610 million in the
net funds provided by operation between 2011 and 2010 originated mainly from the net income for the year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We attribute our net funds used in investing
activities primarily to the acquisition of new facilities, property, plant and equipment and other non-current assets. Our net
funds used in investing activities were Ps. 466 million in 2011, Ps. 693 million in 2010 and Ps. 256 million in 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our net funds provided by financing activities
in 2011 were Ps. 26 million, as compared to Ps. 126 million used by financing activities in 2010. In 2009, net funds provided by
financing activities were Ps. 469 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We do not have in place any interest
rate or currency hedging instruments. We are not a party to any non-exchange traded contracts accounted for at fair value other
than, as described in Note 13 to the consolidated financial statements, certain futures contracts that we entered to fix the price
of our natural gas purchases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of December 31, 2011, we have the
following commitments for capital expenditures:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On September 27, 2011 we entered into
an agreement with SMS Concast Ag., (&ldquo;Concast&rdquo;) providing for our acquisition from Concast of the melt shop equipment
to be used by our subsidiary GV do Brasil Ind&uacute;stria e Com&eacute;rcio de A&ccedil;o Ltda., with an annual production capacity
of 520,000 tons of billet for the production of wire and rebar, with an arc furnace of 65 tons. The purchase price was $15 million
Euros, to be paid in dollars at a fixed exchange rate of 1.3764 dollars per euro in accordance with the following payment schedule:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Down payment of 15% of the purchase price, fifteen days after the signing (Ps. 42,070 to December, 31, 2011)</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>15% due three months from signing,</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>15% due six months from signing,</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>15% due eight months from signing,</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>10% due 10 months from contract signature and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>The remaining 30% through an irrevocable letter of credit, on behalf of the vendor, for a minimum term of 18 months, payable
in installments of 10% of the value of the contract, beginning at the date of substantial receipt of the equipment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The vendor has provided a warranty bond
for the amount of 10% of the contract for a period of 24 months after the major shipment of the equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 18, 2011 we entered into
an agreement with SMS Meer S. p. A. (&ldquo;Meer&rdquo;) providing for our acquisition from Meer of a rolling mill to be used by
our subsidiary GV do Brasil Ind&uacute;stria e Com&eacute;rcio de A&ccedil;o Ltda., with a production capacity of 400,000 tons
of wire and rebar. The purchase price was $19.6 million Euros, to be paid in dollars at a fixed exchange rate of 1.3482 dollars
per euro. The payments will be done on dollars in accordance with the following payment schedule:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>80% of the contract through an irrevocable letter of credit on behalf of Meer, valid for 14 months, to be granted at the time
of receipt of the majority of the equipment;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt">20% of the contract price shall be paid in US dollars through an irrevocable, non-transferable
documentary letter of credit, which shall be entered into 11.5 months from the signing of the supply contract, with a minimum validity
of 14.5 months and payable in two parts:</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a)</TD><TD>10% of the contract once the cold tests are performed, Meer will provide a bank warranty on behalf of Simec for the same amount,
which will be valid for 8 months after the last major shipment.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b)</TD><TD>10% of the contract after the signing of the final acceptance certificate. The warranty period of the equipment will be 18
months after the last major shipment until the signing of the provisional acceptance certificate.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic leases certain equipment, office
space and computer equipment under non-cancelable operating leases. The leases expire at various dates through 2017. During the
years ended December 31, 2011, 2010 and 2009, rental expense relating to operating leases amounted to $5.4 million, $4.8 million
and $5.9 million, respectively. At December 31, 2011, total future minimum lease payments under non-cancelable operating leases
are $0.8, $0.4, $0.3 and $0.4 million for 2012, 2013, 2014 and 2015, respectively and $0.3 million each in the years 2016 and 2017.
There are no obligations after 2017.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Research and Development, Patents and Licenses</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The San Luis facilities are registered
with the Mexican Institute of Industrial Property (&ldquo;IMPI&rdquo;) and the trademarks &ldquo;SAN&rdquo; and &ldquo;Aceros San
Luis&rdquo;. Also, a patent is currently in process of registration before the IMPI entitled in favor of Simec International 6,
S.A. de C.V.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>Trend Information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In the first quarter 2012 net sales increased
4% compared to the fourth quarter 2011. Sales in tons of finished steel increased 5% in the first quarter 2012 compared with the
fourth quarter 2011. Prices of finished products sold in the first quarter 2012 decreased approximately 2% compared to the fourth
quarter 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">All of the statements in this &ldquo;Trend
Information&rdquo; section are subject to and qualified by the information set forth under the &ldquo;Cautionary Statement Regarding
Forward Looking Statements.&rdquo; See also Item 5.A &ldquo;Operating and Financial Review and Prospects&mdash;Overview of Operating
Results.&rdquo;</P>

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<TD STYLE="width: 0"></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top"><TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">E.</FONT></TD><TD>Off-Balance Sheet Arrangements</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We do not have any material off-balance
sheet arrangements.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">F.</FONT></TD><TD>Contractual Obligations</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The table below sets forth our significant
short-term and long-term contractual obligations as of December 31, 2011:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Maturity</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Less than 1 year</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">1&ndash; 3 years</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">4&ndash; 5 years</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">In excess of 5 years</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="19" STYLE="text-align: center">(millions of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Short-term debt obligations of related parties<SUP>(1)</SUP>&#9;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">706</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">706</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Short-term debt obligations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Long-term contractual obligations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.2in">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">710</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">710</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Ps. 701 million correspond to a note payable to Industrias CH, Tuber&iacute;as Procarsa, Pytsa Industrial de M&eacute;xico
and Procarsa Tube and Pipe denominated in U.S. dollars, for an indefinite term and bearing annual interest at a rate of 0.25%;
Ps. 5 million correspond to other liabilities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic leases certain equipment, office
space and computers through operating contracts under non-cancelable operating leases. These lease contracts expire on several
different dates by the end of 2017. During 2011, 2010 and 2009, the expenses for operating leases were U.S.$5.4 million, U.S.$4.8
million and U.S.$5.9 million, respectively. As of December 31, 2011, total future minimum lease payments under non-cancelable operating
leases are U.S.$0.8 million in 2012, U.S.$0.4 million in 2013, U.S.$0.3 million in 2014, U.S.$0.4 million in 2015 and U.S.$0.3
million each in the years 2016 and 2017. At December 31, 2011 there are no additional obligations after 2017.</P>

<P STYLE="margin: 0 0 6"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_008"></A> <FONT STYLE="color: #010000">6.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Directors, Senior Management and Employees</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0; padding-top: 6; padding-bottom: 6"></TD><TD STYLE="width: 0.25in; padding-top: 6; padding-bottom: 6"><FONT STYLE="color: #010000">A.</FONT></TD><TD STYLE="padding-top: 6; padding-bottom: 6">Directors and Senior Management</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Our Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our board of directors is responsible
for managing our business. Pursuant to our by-laws, the board of directors shall consist of a maximum of 21 but not less than five
members elected at an ordinary general meeting of shareholders. Our board of directors currently consists of seven directors, each
of whom is elected at the annual shareholders&rsquo; meeting for a term of one year with an additional period of thirty days, if
a successor has not been appointed. The board of directors may appoint provisional directors until the shareholders&rsquo; meeting
appoints the new directors. Under the Mexican Securities Market Law and our bylaws, at least 25% of our directors must be independent.
Under the law, the determination as to the independence of our directors made by our shareholders&rsquo; meeting may be contested
by the CNBV.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Election of the Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">At each shareholders&rsquo; meeting for
the election of directors, the holders of shares are entitled pursuant to our by-laws to elect the directors. Each person (or group
of persons acting together) holding 10% of our capital stock is entitled to designate one director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The current members of our board of directors
were nominated and elected to such position at the 2011 general meeting of shareholders as proposed by Industrias CH. We expect
that Industrias CH will be in a position to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">continue
to elect the majority of our directors and to exercise substantial influence and control over our business and policies and to
influence us to enter into transactions with Industrias CH and affiliated companies. However, our by-laws provide that at least
25% of our directors must be independent from us and our affiliates, and our board of directors has passed a resolution requiring
the approval of at least two independent directors for certain transactions between us and our affiliates which are not our subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, a majority shareholder
has no fiduciary duty to minority shareholders but may not act contrary to the interests of the corporation for the majority shareholder&rsquo;s
benefit. Such a majority shareholder is required to abstain from voting on any matter in which it directly or indirectly has a
conflict of interest and can be liable for actual and consequential damages if such matter passes as a result of its vote in favor
thereof. In addition, the directors of a Mexican corporation owe a duty to act in a manner which, in their independent judgment,
is in the best interests of the corporation and all its shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our board of directors adopted a code
of ethics in December 2002.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Authority of the Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The board of directors is our legal representative.
The board of directors must approve, among other matters, the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our general strategy;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>annual approval of the business plan and the investment budget;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>capital investments not considered in the approved annual budget for each fiscal year;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>proposals to increase our capital or that of our subsidiaries;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>with input from the Audit Committee, on an individual basis: (i) any transactions with related parties, subject to certain
limited exceptions, (ii) our management structure and any amendments thereto, and (iii) the election of our chief executive officer,
his compensation and removal for justified causes; (iv) our financial statements and those of our subsidiaries, (v) unusual or
non- recurrent transactions and any transactions or series of related transactions during any calendar year that involve (a) the
acquisition or sale of assets with a value equal to or exceeding 5% of our consolidated assets or (b) the giving of collateral
or guarantees or the assumption of liabilities, equal to or exceeding 5% of our consolidated assets, and (vi) contracts with external
auditors and the chief executive officer annual report to the shareholders&rsquo; meeting;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>calling shareholders&rsquo; meetings and acting on their resolutions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any transfer by us of shares in our subsidiaries;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>creation of special committees and granting them the power and authority, provided that the committees will not have the authority
which by law or under our by-laws is expressly reserved for the board of directors or the shareholders;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>determining how to vote the shares that we hold in our subsidiaries; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the exercise of our general powers in order to comply with our corporate purpose.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Meetings of the board of directors will
be validly convened and held if a majority of our members are present. Resolutions at the meetings will be valid if approved by
a majority of the members of the board of directors, unless our by-laws require a higher number. The chairman has a tie-breaking
vote. Notwithstanding the board&rsquo;s authority, our shareholders pursuant to decisions validly taken at a shareholders&rsquo;
meeting at all times may override the board.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Duty of Care and Duty of Loyalty</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Securities Market Law imposes
a duty of care and a duty of loyalty on directors. The duty of care requires our directors to act in good faith and in the best
interests of the company. In carrying out this duty, our directors are required to obtain the necessary information from the executive
officers, the external auditors or any other person to act in the best interests of the company. Our directors are liable for damages
and losses caused to us and our subsidiaries as a result of violating their duty of care.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The duty of loyalty requires our directors
to preserve the confidentiality of information received in connection with the performance of their duties and to abstain from
discussing or voting on matters in which they have a conflict of interest. In addition, the duty of loyalty is violated if a shareholder
or group of shareholders is knowingly favored or if, without the express approval of the board of directors, a director takes advantage
of a corporate opportunity. The duty of loyalty is also violated, among other things, by (i) failing to disclose to the audit and
corporate practices committee or the external auditors any irregularities that the director encounters in the performance of his
or her duties or (ii) disclosing information that is false or misleading or omitting to record any transaction in our records that
could affect our financial statements. Directors are liable for damages and losses caused to us and our subsidiaries for violations
of this duty of loyalty. This liability also extends to damages and losses caused as a result of benefits obtained by the director
or directors or third parties, as a result of actions of such directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our directors may be subject to criminal
penalties of up to 12 years&rsquo; imprisonment for certain illegal acts involving willful misconduct that result in losses to
us. Such acts include the alteration of financial statements and records.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Liability actions for damages and losses
resulting from the violation of the duty of care or the duty of loyalty may be exercised solely for our benefit and may be brought
by us, or by shareholders representing 5% or more of our capital stock, and criminal actions only may be brought by the Mexican
Ministry of Finance, after consulting with the CNBV. As a safe harbor for directors, the liabilities specified above (including
criminal liability) will not be applicable if the director acting in good faith (i) complied with applicable law, (ii) made the
decision based upon information provided by our executive officers or third-party experts, the capacity and credibility of which
could not be subject to reasonable doubt, (iii) selected the most adequate alternative in good faith or if the negative effects
of such decision could not have been foreseeable, and (iv) complied with shareholders&rsquo; resolutions provided the resolutions
do not violate applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The members of the board are liable to
our shareholders only for the loss of net worth suffered as a consequence of disloyal acts carried out in excess of their authority
or in violation of our by-laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In accordance with the Mexican Securities
Market Law, supervision of our management is entrusted to our board of directors, which shall act through an audit and corporate
practices committee for such purposes, and to our external auditor. The audit and corporate practices committee (together with
the board of directors) replaces the statutory auditor (<I>comisario</I>) that previously had been required by the Mexican Corporations
Law. See Item 6.C. &ldquo;&mdash; Committees&rdquo; below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth the names
of the members of our board of directors and the year of their initial appointment:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Name </B></P></TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Director
        Since</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Rufino Vigil Gonz&aacute;lez</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2001</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Ra&uacute;l Arturo P&eacute;rez Trejo</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2003</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Sergio Vigil Gonz&aacute;lez</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Luis Garc&iacute;a Lim&oacute;n</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Jos&eacute; Luis Rico Maciel</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2001</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Rodolfo Garc&iacute;a G&oacute;mez de Parada</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2001</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Gerardo Arturo Avenda&ntilde;o Guzm&aacute;n</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2001</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Biographical Information of our Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Gerardo Arturo Avenda&ntilde;o
Guzm&aacute;n</I>. </B>Mr. Avenda&ntilde;o was born in 1955. He is an independent director for purposes of Mexican law and has
been a member of our board of directors and the Audit Committee since 2001 and is a member of our Audit Committee. Mr. Avenda&ntilde;o
is an independent lawyer specializing in civil, mercantile and fiscal litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Rodolfo Garc&iacute;a G&oacute;mez
de Parada</I></B>. Mr. Garc&iacute;a was born in 1953. He has been a member of our board of directors since 2001 and is an independent
director for purposes of Mexican law. He has been the tax adviser of Industrias CH since 1978 and our tax adviser since 2001 and
is a member of the board of directors of a group of self-service stores and restaurants since 1990.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Luis Garc&iacute;a Lim&oacute;n</I></B>.
Mr. Garc&iacute;a was born in 1944. He is currently our chief executive officer. From 1982 to 1990 he was general director of Compa&ntilde;&iacute;a
Sider&uacute;rgica de Guadalajara, S.A. de C.V. (&ldquo;<U>CSG</U>&rdquo;), from 1978 to 1982 he was Operation Director of CSG,
from 1974 to 1978 he was general manager of Moly Cop and Pyesa, and from 1969-1974 he was Engineering Manager of CSG. In addition,
from 1967 to 1969 Mr. Garc&iacute;a was the director of electrical installation of a construction company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Ra&uacute;l Arturo P&eacute;rez
Trejo</I></B>. Mr. P&eacute;rez was born in 1959. He has been a member of our board of directors since 2003, and is an independent
director for purposes of Mexican law, and is the chairman of our Audit Committee. Mr. P&eacute;rez has also served since 1992 as
the chief financial officer of a group that produces and sells structural steel racks for warehousing and other industrial storage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Jos&eacute; Luis Rico Maciel</I>.
</B>Mr. Rico was born in 1926. He has been a member of our board of directors since 2001. He also serves as our corporate legal
and tax director and is a member of the board of directors of a group of self-service stores and restaurants since 1957.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B>Sergio <I>Vigil Gonz&aacute;lez</I>.
</B>Mr. Vigil was born in 1962. Since 2001 he has served as chief executive officer of Industrias CH, our controller. Mr. Vigil
is a brother of Rufino Vigil Gonz&aacute;lez.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Rufino Vigil Gonz&aacute;lez</I>.
</B>Mr. Vigil was born in 1948. He is currently the chairman of our board of directors and has been a member of the board of directors
since 2001. Since 1973, Mr. Vigil has been chief executive officer of a steel related products corporation. From 1988 to 1993,
Mr. Vigil was a member of the board of directors of a Mexican investment bank and from 1971 to 1973 he was a construction corporation
manager. Mr. Vigil is a brother of Sergio Vigil Gonz&aacute;lez.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Executive Officers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth the names
of our executive officers, their current position with us and the year of their initial appointment to that position.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif; margin-bottom: 3pt">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Name</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Position</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Position <BR>Held Since</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; text-align: left; padding-left: 5.4pt">Luis Garc&iacute;a Lim&oacute;n</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 27%; text-align: center; padding-left: 10pt">Chief Executive Officer</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 27%; text-align: center; padding-left: 5.4pt">1982*</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Adolfo Luna Luna</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 10pt">Chief Financial Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">2010</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Juan Jos&eacute; Acosta Mac&iacute;as</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 10pt">Chief Operating Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">2004</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Marcos Maga&ntilde;a Rodarte</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 10pt">Chief Sales Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">2001</TD>
    </TR>
</TABLE>

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<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: -0.25in">* Represents the date as of which
Mr. Garc&iacute;a Lim&oacute;n first held this office with our predecessor, CSG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Luis Garc&iacute;a Lim&oacute;n</I></B>.
Mr. Garc&iacute;a was born in 1944. He is currently our chief executive officer. From 1982 to 1990 he was general director of CSG,
from 1978 to 1982 he was Operation Director of CSG, from 1974 to 1978 he was general manager of Moly Cop and Pyesa, and from 1969-1974
he was Engineering Manager of CSG. In addition, from 1967 to 1969 Mr. Garc&iacute;a was the director of electrical installation
of a construction company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Adolfo Luna Luna</I></B>. Mr. Luna
was born in 1955. He is currently our chief financial officer. From 2004 to 2009 he was our chief financial officer of the facility
of Tlaxcala. From 2001 to 2004 he was our chief financial officer. Previously, Mr. Luna was our auditor manager from 2000 to 2001.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Juan Jos&eacute; Acosta Mac&iacute;as</I>.
</B>Mr. Acosta was born in 1960. He is currently our chief operating officer. From 1998 to 2004 he was production manager of CSG,
he has been working with us since 1983. Prior to working with us, Mr. Acosta worked for Mexicana de Cobre as a supervisor in 1982.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B><I>Marcos Maga&ntilde;a Rodarte</I></B>.
Mr. Maga&ntilde;a was born in 1965. He is currently our marketing and sales director. Before holding this position, Mr. Maga&ntilde;a
was domestic sales manager of CSG from 1997 to 2001, sales manager for the western region of CSG from 1994 to 1996, sales manager
of Met&aacute;lica Las Torres, our subsidiary, from 1992 to 1994 and a salesman for CSG, from 1990 to 1992. Before working with
us, Mr. Maga&ntilde;a worked for a bank as executive promoter of sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our chief executive officer and executive
officers are required, under the Mexican Securities Market Law, to act for our benefit and not that of a shareholder or group of
shareholders. Our chief executive is required, principally, to (i) implement the instructions of our shareholders&rsquo; meeting
and our board of directors, (ii) submit to the board of directors for approval the principal strategies for the business, (iii)
submit to the Audit Committee proposals for the systems of internal control, (iv) disclose all material information to the public
and (v) maintain adequate accounting and registration systems and mechanisms for internal control. Our chief executive officer
and our executive officers will also be subject to liability of the type described above in connection with our directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The business address of our directors
and executive officers is our principal executive headquarters.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Compensation</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">For the years ended December 31, 2011
and 2010, we paid no fees to our seven directors, and the aggregate compensation our executive officers earned was approximately
Ps. 31.1 million and Ps. 21 million, respectively. We do not provide pension, retirement or similar benefits to our directors in
their capacity as directors. Our executive officers are eligible for retirement and severance benefits required by Mexican law
on the same terms as all other employees, and we do not separately set aside, accrue or determine the amount of our costs that
is attributable to executive officers.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Board Practices</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None of our directors or executive officers
are entitled to benefits upon termination under their service contracts with us, except for what is due them according to the Mexican
Federal Labor Law <I>(Ley Federal del Trabajo)</I>.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Committees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our by-laws provide for an audit and
corporate practices committee to assist the board of directors with the management of our business.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Audit and Corporate Practices Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our by-laws provide that the audit and
corporate practices committee shall be at least three members, all of which must be independent directors. The chairman of the
audit and corporate practices committee is elected by our shareholders&rsquo; meeting, and the board of directors appoints the
remaining members.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The audit and corporate practices committee
is currently composed of three members. Ra&uacute;l Arturo P&eacute;rez Trejo, the chairman of the audit and corporate practices
committee, was elected at our annual ordinary shareholders&rsquo; meeting held on April 29, 2011, and Gerardo Arturo Avenda&ntilde;o
Guzm&aacute;n and Rodolfo Garc&iacute;a G&oacute;mez de Parada were appointed. Ra&uacute;l Arturo P&eacute;rez Trejo has been appointed
as the &ldquo;audit committee financial expert.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The audit and corporate practices committee
is responsible, among others, for (i) supervising our external auditors and analyzing their reports, (ii) analyzing and supervising
the preparation of our financial statements, (iii) informing the board of our internal controls and their adequacy, (iv) requesting
reports of our board of directors and executive officers whenever it deems appropriate, (v) informing the board of any irregularities
that it may encounter, (vi) receiving and analyzing recommendations and observations made by the shareholders, members of the board,
executive officers, our external auditors or any third party and taking the necessary actions, (vii) calling shareholders&rsquo;
meetings, (viii) supervising the activities of our chief executive officer, (ix) providing an annual report to the annual shareholders&rsquo;
meeting, (x) providing opinions to our board of directors, (xi) requesting and obtaining opinions from independent third parties
and (xii) assisting the board in the preparation of annual reports and other reporting obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The chairman of the audit and corporate
practices committee, shall prepare an annual report to the annual shareholders&rsquo; meeting with respect to the findings of the
audit and corporate practices committee, which shall include (i) the status of the internal controls and internal audits and any
deviations and deficiencies thereof, taking into consideration the reports of external auditors and independent experts, (ii) the
results of any preventive and corrective measures taken based on results of investigations in respect of non-compliance of operating
and accounting policies, (iii) the evaluation of external auditors, (iv) the main results from the review of our financial statements
and those of our subsidiaries, (v) the description and effects of changes to accounting policies, (vi) the measures adopted as
result of observations of shareholders, directors, executive officers and third parties relating to accounting, internal controls,
and internal or external audits; (vii) compliance with shareholders&rsquo; and directors&rsquo; resolutions; (viii) observations
with respect to relevant directors and officers; (ix) the transactions entered into with related parties; and (x) the remuneration
paid to directors and officers.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>Employees</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">&nbsp;As of December 31, 2011, we had
4,686 employees (2,762 were employed at our Mexico facilities, of whom 1,545 were unionized, and 1,924 were employed at Republic
facilities, of whom 1,568 were unionized),&nbsp;compared to 4,361 employees as of December 31, 2010, (2,731 were employed at our
Mexico facilities, of whom 1,546 were unionized, and 1,630 were employed at Republic facilities, of whom 1,318 were unionized).
As of December 31, 2009 we had 4,378 employees (2,738 were employed at our Mexico facilities, of whom 1,413 were unionized, and
1,640 were employed at Republic facilities, of whom 1,345 were unionized).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The unionized employees in each of our
Mexican facilities are affiliated with different unions. Salaries and benefits of our Mexican unionized employees are determined
annually through collective bargaining agreements. Set forth below is the union affiliation of the employees of each of our Mexican
facilities and the expiration date of the current collective bargaining agreements.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Guadalajara facilities: </I>Sindicato de Trabajadores en la Industria Sider&uacute;rgica y Similares en el Estado de Jalisco.
The contract expires on February 13, 2013.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Mexicali facilities</I>: Sindicato de Trabajadores de la Industria Procesadora y Comercializaci&oacute;n de Metales de Baja
California. The contract expires on January 15, 2013.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Apizaco facilities</I>: Sindicato Nacional de Trabajadores de Productos Met&aacute;licos, Similares y Conexos de la Rep&uacute;blica
Mexicana. The contract expires on January 15, 2013.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Cholula facilities</I>: Sindicato Industrial &quot;Acci&oacute;n y Fuerza&quot; de Trabajadores Metal&uacute;rgicos Fundidores,
Mec&aacute;nicos y Conexos CROM del Estado de Puebla. The contract expires on February 28, 2013.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>San Luis facilities</I>: At the Aceros San Luis facility: Sindicato de Empresas adherido a la CTM; and at the Aceros DM
and Abastecedora Sider&uacute;rgica facilities: Sindicato de Trabajadores de la Industria Metal Mec&aacute;nica, Similares y Conexos
del Estado de San Luis Potos&iacute; CTM. The contracts expire on January 14, 2013, January 23, 2013 and January 14, 2013, respectively.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have had good relations with the unions
in our Mexican facilities. The collective bargaining agreements are renegotiated every two years, and wages are adjusted every
year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic is the only subsidiary of the
Group which offers other benefits and pension plans to their employees. Benefit plans to employees with Republic are described
below.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Collective Bargaining Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Seventy-nine percent of Republic&rsquo;s
workers are covered by a collective bargaining agreement with the United Steelworkers (USW), which was originally set to expire
August 15, 2012. On March 29, 2012, the USW ratified a new agreement that expires on August 15, 2016.&nbsp; For the Mexican operations,
approximately 56% of the employees are under collective bargaining agreements, which expire as described above.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Defined Contribution Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic is required to make a contribution
to the VEBA Benefit Trust for every hour worked by eligible employees. This welfare plan makes provision for retiree healthcare
benefits, and is not a &ldquo;qualified&rdquo; plan under ERISA regulations. The labor agreement requires a contribution, by the
company, to the retirement healthcare plan of U.S.$3.00 for every hour worked, not to be less than U.S.$2.85&nbsp;million per quarter,
but not to exceed U.S.$11.4&nbsp;million per year. For the years ended December&nbsp;31, 2011, 2010 and 2009, the company recorded
expenses of U.S.$8.5 million U.S.$11.4 million and U.S.$11.4&nbsp;million respectively, related to this welfare plan. Contributions
are also made to the SWP Trust, a &ldquo;qualified&rdquo; pension benefit plan under ERISA regulations, at a rate of U.S.$1.68
per hour as defined in the labor agreement. For the years ended December&nbsp;31, 2011, 2010 and 2009, the company recorded expenses
of U.S.$6.0 million, U.S.$7.1 million and U.S.$7.1&nbsp;million, respectively, related to this pension benefit plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On March 29, 2012, the USW and Republic
ratified a new collective bargaining agreement, which expires on August 15, 2016. The agreement includes wage and benefit increases,
including two lump sum payments payable to active USW employees during 2012, and general wage increases in 2013, 2014, and 2015.
Company contributions to fund the Republic Retirement VEBA Benefit Trust (Benefit Trust) were reduced by $2.0 million per year
beginning in 2012. In addition, the quarterly contribution amount was suspended beginning in the fourth quarter of 2011 and continuing
through the third quarter of 2012. Contributions to the Benefit Trust will resume during fourth quarter of 2012, at a quarterly
rate of approximately $2.4 million, with an increase to a $2.6 million quarterly rate beginning in the second quarter of 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic has a defined contribution 401K
retirement plan that covers substantially all salary and nonunion hourly employees. This plan is designed to provide retirement
benefits through company contributions and voluntary deferrals of employees&rsquo; compensation. Republic funds contributions to
this plan each pay period based upon the participants age and service as of January first of each year. The amount of Republic&rsquo;s
contribution is equal to the monthly base salary multiplied by the appropriate percentage based on age and years of service. The
contribution becomes 100% vested upon completion of three years of vesting service. In addition, employees are permitted to make
contributions into a 401K retirement plan through payroll deferrals. Republic provides a 25.0% matching contribution for the first
5.0% of payroll that an employee elects to contribute. Employees are 100.0% vested in both their and Republic&rsquo;s matching
401K contributions. For 2011, 2010 and 2009, Republic recorded expense of U.S.$2.1 million, U.S.$2.0 million and U.S.$1.9 million,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Employees who are covered by the USW
labor agreement are eligible to participate in the defined contribution 401K retirement plan through voluntary deferrals of employees&rsquo;
compensation. There are no company contributions or employer matching contributions relating to these employees.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Profit Sharing Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The labor agreement includes a profit
sharing plan to which Republic is required to contribute 2.5% of its quarterly pre-tax income, as defined in the labor agreement.
At the end of the year, the contribution will be based upon annual pre-tax income up to U.S.$50.0&nbsp;million multiplied by 2.5%,
U.S.$50.0&nbsp;million to U.S.$100.0&nbsp;million</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">multiplied
by 3.0%, and above U.S.$100.0&nbsp;million multiplied by 3.5%, less the previous payouts during the year. Profit sharing earned,
accrued and expensed was U.S.$1.0 million for the year ended December&nbsp;31, 2011. There was no profit sharing earned, accrued
or recorded for the year ended December 31, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic has a profit sharing plan for
all salaried and nonunion hourly employees and which is based upon achieving business plan EBITDA objectives. The company paid
U.S.$0.3 million for profit sharing at December 31, 2011 related to 2011 performance. However, the amounts paid in 2011 were discretionary
as the financial thresholds of the profit sharing plan had not been reached in any quarter or for the year. No profit sharing was
accrued or expensed for the years ended December 31, 2010 and 2009.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Incentive Compensation Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic has various incentive compensation
plans that are based on attaining certain Business Plan and other performance targets for the financial calendar year. The objectives
are measured on a quarterly basis. Individuals designated as participants in these plans are excluded from the company&rsquo;s
regular profit sharing plan. For the years ended December&nbsp;31, 2011, 2010 and 2009, there were no incentives earned under these
plans as the target thresholds for the respective years were not achieved.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">E.</FONT></TD><TD>Share Ownership</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Industrias CH and its direct wholly-owned
subsidiaries currently hold approximately 84% of our series B shares. At December 31, 2011, Rufino Vigil Gonz&aacute;lez, the chairman
of our board of directors, owned, directly or indirectly, approximately 64% of Industrias CH.</P>

<P STYLE="margin: 0 0 6"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_009"></A> <FONT STYLE="color: #010000">7.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Major Shareholders and Related Party Transactions</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Major Shareholders</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of April 25, 2012, we had 497,709,214
shares of series B common stock outstanding, including 53,406,905 additional series B shares that we sold in a public offering
on February 8, 2007. Based on information available to us, we believe that our officers and directors own no series B shares. Accordingly,
on an individual basis, and as a group, our directors and executive officers beneficially owned less than one percent of any class
of our shares. None of our directors or officers holds any options to purchase series B shares or preferred shares. Prior to June
2002, our capital stock also included series A shares. On June 5, 2002, we converted all of our series A shares to series B shares
on a one-for-one basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Industrias CH and its direct wholly-owned
subsidiaries currently hold approximately 84% of our series B shares. Rufino Vigil Gonz&aacute;lez, the chairman of our board of
directors, owns, directly or indirectly, approximately 64% of Industrias CH.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our major shareholders do not have voting
rights different from the rights of our other shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table shows the ownership
of our series B shares as of April 25, 2012.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name of Shareholder</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of shares<BR> owned</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">% of shares<BR> owned</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">Industrias CH, S.A.B. de C.V</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">275,369,337</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">55.3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Tuber&iacute;as Procarsa, S.A. de C.V. <SUP>(1)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,461,866</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Proyectos Comerciales el Ninzi, S.A. de C.V.<SUP>(2)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,207,654</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Aceros y Laminados Sigosa, S.A. de C.V. <SUP>(1)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,377,776</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.9</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Joist Estructuras S.A. de C.V. <SUP>(2)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,188,406</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.2</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Industrial de Herramientas CH, S.A. de C.V. <SUP>(2)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,240,628</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Compa&ntilde;&iacute;a Mexicana de Tubos, S.A. de C.V. <SUP>(2)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,841,082</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.8</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Public Investors</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">79,022,465</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15.8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt; width: 56%">Total</TD><TD STYLE="padding-bottom: 1pt; width: 5%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; width: 4%">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; width: 12%">497,709,214</TD><TD STYLE="padding-bottom: 1pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; width: 8%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; width: 12%">100</TD><TD STYLE="padding-bottom: 1pt; text-align: left; width: 1%">%</TD></TR>
</TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>A subsidiary of Industrias CH.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Companies directly or indirectly owned by members of the Vigil family.</TD></TR></TABLE>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">At March 31, 2012, 487,801,198 series
B common shares were held in Mexico by approximately 375 shareholders who were record holders in Mexico and 17 were ADS record
holders in the United States. The ADS represent 9,908,016 common shares.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Related Party Transactions</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have engaged from time to time in
a number of transactions with certain of our shareholders and companies that are owned or controlled, directly or indirectly, by
our controlling shareholder, Industrias CH. These transactions were made on terms that we believe were not less favorable to us
than those obtainable on an arm&rsquo;s length basis. See Note 6 to our consolidated financial statements included elsewhere herein.
On July 22, 2005, we and Industrias CH acquired 100% of the stock of Republic through SimRep. We acquired 50.2% (U.S.$123 million
or Ps. 1,403 million) of Republic&rsquo;s stock through our majority owned subsidiary, SimRep, and Industrias CH purchased the
remaining 49.8%. We financed our portion of the purchase price principally from a loan that we received through Industrias CH that
has since been repaid in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have borrowed various amounts from
Industrias CH, primarily to finance acquisitions (including the acquisition of Republic), debt redemptions and bank loan amortization
and interest payments, a substantial portion of which borrowings were converted to equity. We have also received various capital
contributions from Industrias CH.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">From time to time we sell steel products,
primarily billet, to Industrias CH and its affiliates. In 2009 these sales totaled Ps. 150 million, in 2010, these sales totaled
Ps. 43 million and in 2011 these sales totaled Ps. 31 million. In addition, in 2009, 2010 and 2011 we purchased Ps. 38 million,
Ps. 81 million and Ps. 66 million, respectively, of steel products from Industrias CH and its affiliates. We negotiated these prices
on an arms-length basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have a services agreement with Industrias
CH, by which Industrias CH provides administrative services to us and our subsidiaries. The term of the agreement is indefinite.
The payments are paid to Industrias CH on a monthly basis. Under the services, in 2009 we paid Ps. 15 million, in 2010 we paid
Ps. 14 million and in 2011 we paid Ps. 14 million.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Interests of Experts and Counsel</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<P STYLE="margin: 0 0 6"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_010"></A> <FONT STYLE="color: #010000">8.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Financial Information</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Consolidated Statements and Other Financial Information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">See Item 18. &ldquo;Financial Statements&rdquo;
and &ldquo;Index to Financial Statements.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Legal Proceedings</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Mexico</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">There are currently no material legal
or administrative proceedings pending in Mexico against us or any of our subsidiaries which we expect to have a material adverse
effect on our financial condition or results of operations, or which we expect to result in material capital expenditures or materially
adversely affect our competitive position.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">United States</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our operations in the United States and
Canada have been the subject of various environmental claims, including those described below. The resolution of any claims against
us may result in significant liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>California Regional Water Control Board, CRWCB</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">On August 16, 2011, the California Regional
Water Quality Control Board (CRWCB) and the California Environmental Protection Agency (CALEPA) inspected the facilities of Pacific
Steel in order to investigate drainage from the facility into street waters. On September 1, 2011, PS received an &ldquo;Order
to Cease &amp; Desist Clean and Abate&rdquo;(OCDCA) from the CALEPA. On September 15, 2011 the CALEPA conducted a follow-up investigation,
and indicated that it was satisfied with the compliance to the OCDCA of PS. At December 31, 2011, the California Regional Water
Quality Control Board (CRWCB) has not notified us with respect to the result of its inspection.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Department of Toxic Substances Control, DTSC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In September 2002, the Department of
Toxic Substances Control (DTSC) inspected Pacific Steel&rsquo;s (PS) facilities based on an alleged complaint from neighbors due
to PS&rsquo;s excavating to recover scrap metal on its property and on a neighbor&rsquo;s property, which PS rents from a third
party. In this same month, DTSC issued an enforcement order of imminent and substantial endangerment determination, which alleges
that certain soil piles, soil management and metal recovery operations may cause an imminent and substantial danger to human health
and the environment. Consequently, DTSC sanctioned PS for violating hazardous waste laws and the State of California Security Code
and imposed the obligation to make necessary changes to the location. On July 26, 2004, in an effort to continue with this order,
DTSC filed against PS a Complaint for Civil Penalties and Injunctive Relief in San Diego Superior Court. On July 26, 2004, the
court issued a judgment, whereby PS was obligated to pay US$235,000. This payment was made by PS in 2004 and 2005.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On June 6, 2010 the DTSC and the San
Diego Department of Environmental Health (DEH) inspected the facilities of PS, in response to a general complaint. On August 10,
2010 DTSC and DEH conducted a second inspection and found seven infractions. The DEH is satisfied with the compliance of PS on
those issues. On October 19, 2010 the technical division of the DTSC recommended to the enforcement division of DTSC that it impose
significant penalties upon us as a result of such infractions. As of December 31, 2011 PS is awaiting a final decision from DTSC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2011 we suspended soil treatment activities
due to their having been ineffective, as we determined as a result of several studies and, once permits were obtained from the
Mexican authorities, we imported soils, beginning in November of 2011, for use at a specialized facility in the state of Nuevo
Le&oacute;n, Mexico. The soil is sent to the specialized facility after the metal content is separated, which metal content is
used as raw material at the Mexicali facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As consequence of two reports broadcasted
on a local TV channel about PS in support to two San Diego Bay environmental groups, the DTSC required on November 22, 2011 that
PS implement procedures for the final disposition of the treated soils, given that the soils are considered by DTSC to be hazardous
waste. PS is now reviewing the different alternatives for the final disposition of those soils.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Due to the fact that the cleanliness
levels have not yet been determined by the DTSC and since the assessment of the entire property has not yet been completed, we
are unable to estimate the costs associated with such above-mentioned remediation measures. The company has prepared an estimate,
based on prior years&rsquo; experience, considering the same processes, volume costs, use of equipment and personnel and assuming
that an agreement will be reached with the DTSC in respect of defining the cleanliness levels. The results range from US$0.8 million
to US$1.7 million. On such bases, the company created a provision for this contingency at December 31, 2002, of approximately US$1.7
million. At December 31, 2011 the allowance amounts to US$ 0.4 million. The obtaining of permits for the remediation of the site
from authorities cannot be guaranteed, and we cannot assure you that the corrective measures will not be significantly more costly
than expected.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Community Development Commission, CDC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Community Development Commission
of National City, California (CDC) has expressed its intention to develop the site where PS conducts its operations, at market
value less the cost of remediation and less certain investigation costs incurred.. Pacific Steel has informed the CDC that the
land will not be voluntarily sold unless there is an alternate property where it could relocate its business. The CDC, in accordance
with the State of California law, has the power to expropriate in exchange for payment at market value and, in the event that there
is no other land available to relocate the business, it would also have to pay PS the land&rsquo;s book value. The CDC made an
offer to purchase the land from Pacific Steel for US$6.9 million, based on a business appraisal. The expropriation process was
temporarily suspended through an agreement entered into by both parties in November 2006. This agreement allows Pacific Steel to
explore the possibility of finishing the remediation process of the land and to propose an attractive alternative to CDC which
would allow the company to remain in the area.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Environmental Liabilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As is the case with most steel producers
in the United States and Canada, we could incur significant costs related to environmental compliance activities and remediation
stemming from historical waste management practices or other environmental issues at Republic&rsquo;s facilities. At December 31,
2011 and 2010, we had a reserve to cover probable environmental liabilities totaling U.S.$3.1 million. The reserve includes incremental
direct costs of remediation efforts and post remediation monitoring costs that are expected to be included after corrective actions
are complete. As of December 31, 2011, the current and non-current portions, US$0.4 million and US$2.7 million, respectively, of
the environmental reserve are included in other accrued liabilities and accrued environmental liabilities, respectively, in the
accompanying consolidated balance sheets. The company is not otherwise aware of any material environmental remediation liabilities
or contingent liabilities relating to environmental matters with respect to the Republic&rsquo;s facilities for which the establishment
of an additional reserve would be necessary at this time. To the extent the company incurs any such additional future costs, these
costs will most likely be incurred over a number of years. However, future regulatory action regarding historical waste management
practices at the company&rsquo;s facilities and future changes in applicable laws and regulations may require the company to incur
significant costs that may have a material adverse effect on the company&rsquo;s future financial performance</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Significant Changes</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_011"></A> <FONT STYLE="color: #010000">9.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Offer and Listing</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our series B shares are listed on the
Mexican Stock Exchange, and the ADSs are listed on the New York Stock Exchange. On February 20, 2003, we effected a 1 for 20 reverse
stock split. On May 30, 2006, we effected a 3 for 1 stock split. To maintain trading prices in the United States, the ADS to share
ratio was simultaneously adjusted from one ADS representing one series B share to one ADS representing three Series B shares. The
ADSs are evidenced by American depositary receipts, or &ldquo;ADRs&rdquo;, issued by The Bank of New York as depositary under a
Deposit Agreement, dated as of July 8, 1993, as amended, among us, the depositary and the holders from time to time of ADRs.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Share Price Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following table sets forth for the
periods indicated the high and low sales prices expressed in historical pesos of our series B shares on the Mexican Stock Exchange,
and the high and low sales price expressed in U.S. dollars of the ADSs on the New York Stock Exchange.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexican Stock Exchange</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">New York Stock Exchange</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2007</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">55.91</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">32.50</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">15.46</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">8.55</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2008</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18.48</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.21</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38.64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.52</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.24</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.94</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom"></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><TR STYLE="vertical-align: bottom"><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Mexican Stock Exchange</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">New York Stock Exchange</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom; width: 40%">2010</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">37.80</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">28.20</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">9.08</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">6.49</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.85</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.53</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.95</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.81</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36.91</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.08</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.64</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.77</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.49</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Fourth Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.75</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.89</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.95</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.85</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.13</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30.41</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.84</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.53</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Fourth Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34.09</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.43</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.62</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40.99</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.74</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.96</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.1in; vertical-align: bottom">Second Quarter (through April 30)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39.01</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.71</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt; vertical-align: bottom">2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.1in; text-align: left; vertical-align: bottom">January</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34.09</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.73</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.96</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.1in; text-align: left; vertical-align: bottom">February</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.30</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.1in; text-align: left; vertical-align: bottom">March</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40.99</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34.51</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.74</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.70</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.1in; text-align: left; vertical-align: bottom">April (through April 30)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39.01</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.71</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Trading on the Mexican Stock Exchange</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Stock Exchange (<I>Bolsa
Mexicana de Valores, S.A.B. de C.V.</I>), located in Mexico City, is the only stock exchange in Mexico. Operating continuously
since 1907, the Mexican Stock Exchange is organized as a publicly traded corporation with variable capital stock (<I>sociedad an&oacute;nima
burs&aacute;til de capital variable</I>). Securities trading on the Mexican Stock Exchange occurs each business day from 8:30 a.m.
to 3:00 p.m., Mexico City time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Since January 1999, all trading on the
Mexican Stock Exchange has been effected electronically. The Mexican Stock Exchange may impose a number of measures to promote
an orderly and transparent trading price of securities, including the operation of a system of automatic suspension of trading
in shares of a particular issuer when price fluctuation exceeds certain limits. The Mexican Stock Exchange may also suspend trading
in shares of a particular issuer as a result of:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>non-disclosure of material events; or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>changes in the offer or demand, volume traded, or prevailing share price that are inconsistent with the shares&rsquo; historical
performance and cannot be explained through publicly available information.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Stock Exchange may reinstate
trading in suspended shares when it deems that the material events have been adequately disclosed to public investors or when it
deems that the issuer has adequately explained the reasons for the changes in offer and demand, volume traded, or prevailing share
price. Under current regulations, the Mexican Stock Exchange may consider the measures adopted by the other stock exchanges in
order to suspend and/or resume trading in an issuer&rsquo;s shares in cases where the relevant securities are simultaneously traded
on a stock exchange outside of Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Settlement on the Mexican Stock Exchange
is effected two business days after a share transaction. Deferred settlement is not permitted without the approval of the CNBV,
even where mutually agreed. Most securities traded on the Mexican Stock Exchange are on deposit with the INDEVAL, a privately owned
securities depositary that acts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">as a clearinghouse,
depositary, and custodian, as well as a settlement, transfer, and registration agent for Mexican Stock Exchange transactions,
eliminating the need for physical transfer of securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Although the Mexican Securities Market
Law provides for the existence of an over-the-counter market, no such market for securities in Mexico has developed.</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B> <FONT STYLE="color: #010000">10.<FONT STYLE="font: 7pt Times New Roman, Times, Serif"><A NAME="a_012"></A>
</FONT></FONT>Additional Information</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Share Capital</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Memorandum and Articles of Association</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our principal objects and purposes, as
expressed in the Second Clause of our by-laws, are to engage in the control of companies dedicated to the manufacture, processing
and distribution of diversified special bar quality (&ldquo;SBQ&rdquo;) steel and structural products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Securities Market Law imposes
a duty of care and a duty of loyalty on directors. The duty of care, which generally requires that directors: (i) obtain the information
reasonably necessary to make decisions; (ii) request from officers and auditors information that is relevant to a decision to be
made; (iii) postpone board of directors meetings when a director is not present, has not arrived on time or has not been provided
with the same information as other directors; (iv) deliberate and vote, including if requested with the presence only of the other
directors and the secretary of the board. Directors will breached their duty of care and be subject to liability when damage is
caused to the issuer by any of the following: (i) failure to attend board, shareholders&rsquo; or committee meetings, which failure
prevents such meeting from being duly held; (ii) failure to reveal relevant information to the board of directors or to an applicable
committee, subject to legal or contractual limitations on disclosure of such information; or (iii) failure to comply with the duties
imposed by the Mexican Securities Market Law or the issuer&rsquo;s by-laws. Failure of directors to act with due care makes the
relevant directors jointly and severally liable for damages and losses caused to the issuer and its subsidiaries, which may be
limited in the company&rsquo;s by-laws or by resolution of the shareholders&rsquo; meeting, except in the case of bad faith, willful
misconduct or illegal acts. Liability for breach of the duty of care may also be covered by indemnification provisions and director
and executive officer insurance policies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The duty of loyalty, which primarily
consists of maintaining the confidentiality of information received in connection with the performance of the director&rsquo;s
duties, and abstaining from discussing or voting on matters where the director has a conflict of interest. Directors will have
breached their duty of loyalty in the following cases: (i) if without justification they utilize their position to gain benefits
for themselves or third parties, including an individual shareholder or group of shareholders; (ii) if they vote on or participate
in deliberations concerning an issue on which they have a conflict of interest; (iii) if they do not reveal the conflicts of interests
they have; (iv) if they deliberately favor an individual shareholder or group of shareholders to the detriment of others; (v) if
the approve related party transactions without observing the related guidelines under the Mexican Securities Market Law; (vi) if
they utilize property of the issuer for their own benefit or that of third parties in contravention of relevant policies; (vii)
if they make undue use of privileged information; or (viii) if, for themselves or third parties, they take advantage of a corporate
opportunity. A violation of the duty of loyalty makes the relevant directors jointly and severally liable for damages and losses
caused to the issuer and its subsidiaries, and in every case require removal from their positions. Unlike the duty of care, liability
for breach of the duty of loyalty may not be limited by the company&rsquo;s by-laws, by resolution of the shareholders&rsquo; meeting
or otherwise, nor may indemnification provisions or insurance policies cover such liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our directors may be subject to criminal
penalties of up to 12 years&rsquo; imprisonment for certain illegal acts involving willful misconduct that result in losses to
us, which include, among others, altering financial statements or records. In terms of the General Law of Commercial Companies
and our by-laws, only the shareholders&rsquo; meetings can determinate compensation for the directors. Our directors cannot individually
exercise any of our borrowing</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">powers.
We do not have any retirement plan. Shareholders, or a group of shareholders, that control 10% of our shares can name a director
and (in that director&rsquo;s absence) an alternate director.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Voting Rights and Shareholders&rsquo; Meetings</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Each series B share entitles its holder
to one vote at any meeting of our shareholders. Each series L share would entitle its holder to one vote at any meeting at which
holders of series L shares are entitled to vote. Holders of series L shares would be entitled to vote only on the following matters:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our transformation from one type of company to another;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>to elect one member of our board of directors pursuant to the provisions of our by-laws and the Securities Market Law;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any merger or corporate spin-off in which we are not the surviving entity;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our dissolution or liquidation;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>cancellation of the registration of our shares with the National Registry of Securities; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any action that would prejudice the rights of holders of series L shares and not prejudice the other classes of shares similarly.
A resolution on any such action requires the affirmative vote of a majority of all outstanding series L shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shareholders may vote by proxy duly appointed
in writing. Under Mexican law, holders of shares of any series are also entitled to vote as a class on any action that would prejudice
the rights of holders of shares of such series but not rights of holders of shares of other series, and a holder of shares of such
series would be entitled to judicial relief against any such action taken without such a vote. Our board of directors or other
party calling for shareholder action initially would determine whether an action requires a class vote on these grounds. A negative
determination would be subject to judicial challenge by an affected shareholder, and a court ultimately would determine the necessity
for a class vote. There are no other procedures for determining whether a proposed shareholder action requires a class vote, and
Mexican law does not provide extensive guidance on the criteria to be applied in making such a determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law and our by-laws, we
may hold three types of shareholders&rsquo; meetings: ordinary, extraordinary and special. Ordinary shareholders&rsquo; meetings
are those called to discuss any issue not reserved for extraordinary shareholders&rsquo; meeting. An annual ordinary shareholders&rsquo;
meeting must be convened and held within the first four months following the end of each fiscal year to discuss, among other things,
the board of director&rsquo;s report on our financial statements, the chief executive officer&rsquo;s report on our operations
during the preceding year, a report on fulfillment of our tax obligations of the last fiscal year and the Audit Committee&rsquo;s
report with respect to the preceding year, the appointment of members of the board of directors and the chairman of the Audit Committee,
declaration of dividends and the determination of compensation for members of the board of directors and for members of the Audit
Committee. Under the Mexican Securities Market Law, our ordinary shareholders&rsquo; meeting, in addition to those matters described
above, will have to approve any transaction representing 20% or more of our consolidated assets, executed in a single or a series
of transactions, during any fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Extraordinary shareholders&rsquo; meetings
are those called to consider any of the following matters:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>voluntary dissolution of the company;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>an increase or decrease in a company&rsquo;s minimum fixed capital;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>change in corporate purpose or nationality;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any transformation, merger or spin-off involving the company;</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any stock redemption or issuance of preferred stock or bonds;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the cancellation of the listing of our shares with the National Securities Registry or on any stock exchange;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any other amendment to our by-laws; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any other matters for which applicable Mexican law or our by-laws specifically require an extraordinary meeting.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Special shareholders&rsquo; meetings
are those that shareholders of the same series or class call and hold to consider any matter particularly affecting the relevant
series or class of shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shareholders&rsquo; meetings are required
to be held in our corporate domicile, which is Guadalajara, Jalisco. Calls for shareholders&rsquo; meetings must be made by the
chairman or the secretary of the board of directors or the chairman of our Audit Committee. Any shareholder or group of shareholders
representing at least 10% of our capital stock has the right to request that the chairman of the board of directors or the chairman
of the Audit Committee call a shareholders&rsquo; meeting to discuss the matters indicated in the relevant request. If the chairman
of the board of directors or the chairman of the Audit Committee fails to call a meeting within 15 calendar days following receipt
of the request, the shareholder or group of shareholders representing at least 10% of our capital stock may request that the call
be made by a competent court.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Calls for shareholders&rsquo; meetings
must be published in the official gazette of the state of Jalisco or any major newspaper located in the City of Guadalajara, Jalisco
at least 15 calendar days prior to the date of the meeting. Each call must set forth the place, date and time of the meeting and
the matters to be addressed. Calls must be signed by whomever makes them, provided that calls made by the board of directors or
the Audit Committee must be signed by the chairman, the secretary or a special delegate appointed by the board of directors or
the Audit Committee as appropriate, for that purpose. Shareholders&rsquo; meetings will be validly held and convened without the
need of a prior call or publication whenever all the shares representing our capital are duly represented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">To be admitted to any shareholders&rsquo;
meeting, shareholders must: (i) be registered in our share registry; and (ii) at least 24 hours prior to the commencement of the
meeting submit (a) an admission ticket issued by us for that purpose, and (b) a certificate of deposit of the relevant stock certificates
issued by the Secretary or by a securities deposit institution, a Mexican or foreign bank or securities dealer in accordance with
the Mexican Securities Market Law. Shareholders may be represented at any shareholders&rsquo; meeting by one or more attorneys-in-fact,
and these representatives may not be one of our directors. Representation at shareholders&rsquo; meetings may be substantiated
pursuant to general or special powers of attorney or by a proxy executed before two witnesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">At or prior to the time of the publication
of any call for a shareholders&rsquo; meeting, we will provide copies of the publication to the depositary for distribution to
the holders of ADSs. Holders of ADSs are entitled to instruct the depositary as to the exercise of voting rights pertaining to
the Series B shares. See &ldquo;Description of American Depository Receipts &mdash; Voting Rights.&rdquo;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Quorum</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Ordinary meetings are regarded as legally
convened pursuant to a first call when shares representing more than 50% of our capital are present or duly represented. Resolutions
at ordinary meetings of shareholders are valid when approved by a majority of the shares present at the meeting approves them.
Any number of shares represented at an ordinary meeting of shareholders convened pursuant to a second or subsequent call constitutes
a quorum. Resolutions at ordinary meetings of shareholders convened pursuant to a second or subsequent call are valid when a majority
of the shares present at the meeting approves them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Extraordinary shareholders&rsquo; meetings
are regarded as legally convened pursuant to a first call when shares representing at least 75% of our capital are present or duly
represented, and extraordinary shareholders&rsquo; meetings convened pursuant to a second or subsequent call are regarded as legally
convened when shares representing 50% of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">our capital
are present or duly represented. Resolutions at extraordinary meetings of shareholders are valid when approved by 50% of our capital.
Special meetings of holders of series L shares are governed by the same rules applicable to extraordinary general meeting of holders
of series B shares. The quorum for an extraordinary general meeting at which holders of series L shares may not vote is 75% of
the series B shares, and the quorum for an extraordinary general meeting at which holders of L shares are entitled to vote is
75% of the outstanding capital stock. Whether on first, second or subsequent call, actions at an extraordinary general meeting
generally may be taken by a majority vote of the series B shares outstanding and, on matters which holders of series L shares
are entitled to vote, a majority vote of all the outstanding capital stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our by-laws also establish that a delisting
of our shares requires the vote of holders of 95% of our capital stock.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">No Right of Redemption</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Securities Market Law and
our by-laws provide that our shareholders do not have redemption rights for their shares.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Registration and Transfer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our shares are registered with the National
Securities Registry, as required under the Mexican Securities Market Law and regulations issued by the CNBV. Our shares are evidenced
by share certificates in registered form, and registered dividend coupons may be attached thereto. Our shareholders either may
hold their shares directly, in the form of physical certificates, or indirectly, in book-entry form, through institutions that
have accounts with INDEVAL.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">INDEVAL is the holder of record in respect
of all such shares held in book-entry form. INDEVAL will issue certificates on behalf of our shareholders upon request. INDEVAL
participants, brokers, banks, other financial entities or other entities approved by the CNBV maintain accounts at INDEVAL. We
maintain a stock registry and only those persons listed in such stock registry, and those holding certificates issued by INDEVAL
indicating ownership, and any relevant INDEVAL participants, will be recognized as our shareholders.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Dividends and Distributions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">At the annual general ordinary shareholders&rsquo;
meeting, the board of directors submits our financial statements for the previous fiscal year, together with their report on us,
to the series B shareholders for approval. Under our by-laws and Mexican law, our annual net income, based upon our audited financial
statements prepared in accordance with MFRS, is applied as follows: (i) five percent of our net earnings must be allocated to a
legal reserve fund, until such fund reaches an amount equal to a least 20% of our then current capital stock (which, as of December
31, 2011, was approximately Ps. 4,143 million), (ii) thereafter, a certain percentage of net earnings may be allocated to any general
or specific reserve fund, and (iii) the remainder of any net earnings is allocated as determined by the majority of our shareholders
and may be distributed as dividends. All shares that are fully paid and outstanding at the time a dividend or other distribution
is declared are entitled to share equally in any or other distribution. We will distribute through INDEVAL cash dividends on shares
held through INDEVAL. Any cash dividends on shares evidenced by physical certificates will be paid by surrendering to us the relevant
dividend coupon registered in the name of its holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">To the extent that we declare and pay
dividends on our shares, owners of ADSs at the time a dividend or other distribution is declared will be entitled to receive any
dividends payable in respect of the series B shares underlying their ADSs, subject to the terms of the Deposit Agreement. Cash
dividends will be paid to the depositary in pesos, and, except as otherwise described under &ldquo;Description of American Depositary
Receipts&mdash;Dividends, Other Distribution and Rights&rdquo;, the depositary will convert them into U.S. dollars and pay them
to the holders of ADSs net of currency expenses and applicable fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A shareholder&rsquo;s entitlement to
uncollected dividends lapses within five years following the stated payment date, in favor of us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">For additional tender offer and insider
trading rules applicable to our securities pursuant to Mexican Law, see &ldquo;Market Information.&rdquo;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Changes in Capital Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Increases and reductions of our share
capital must be approved at an ordinary or extraordinary shareholders&rsquo; meeting, subject to the provisions of our by-laws
and the Mexican Corporations Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Subject to the individual ownership limitations
set forth in our by-laws, in the event of an increase of our capital stock, other than (i) in connection with mergers, (ii) for
the conversion of convertible debentures as provided in Section 210 Bis of the Mexican General Law on Negotiable Instruments and
Credit Transactions, (iii) for purposes of conducting a public offering of such shares or (iv) for the resale of shares maintained
in our treasury as a result of repurchase of shares conducted on the Mexican Stock Exchange, our shareholders will have a preemptive
right to subscribe and pay for new stock issued as a result of such increase in proportion to their shareholder interest at that
time. This preemptive right must be exercised by any method provided in Section 132 of the Mexican Corporations Law, by subscription
and payment of the relevant stock within fifteen business days after the date of publication of the corresponding notice to our
shareholders in the in the official gazette of the state of Jalisco or in one of the newspapers of general circulation in Guadalajara,
Jalisco, Mexico, provided that if at the corresponding meeting all of our shares are duly represented, the fifteen business day
period shall commence on the date of the meeting. Preemptive rights cannot be waived in advance and cannot be traded separately
from the corresponding shares that give rise to such right.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Holders of ADSs may exercise preemptive
rights in limited circumstances. See &ldquo;Description of American Depositary Receipts&mdash;Dividends, Other Distributions and
Rights.&rdquo; If a holder of series B shares or ADSs were unable or unwilling to exercise its preemptive rights in connection
with such a capital increase, such holder&rsquo;s proportionate share of dividends and other distributions and voting rights would
decline. In addition, depending on the series of shares increased and the pattern in which preemptive rights were exercised, such
a capital increase might increase or reduce the portion of our capital stock represented by series B shares and ADSs or increase
or reduce the proportionate voting rights of such holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our capital stock may be reduced by resolution
of a shareholders&rsquo; meeting taken pursuant to the rules applicable to capital increases. Our capital stock also may be reduced
upon withdrawal of a shareholder as provided in Section 206 of the Mexican Corporations Law, see &ldquo;&mdash;Voting Rights and
Shareholders&rsquo; Meetings&rdquo; above, or by repurchase of our own stock in accordance with the Mexican Securities Market Law,
see &ldquo;Share Repurchases&rdquo; below.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Share Repurchases</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We may choose to acquire our own shares
through the Mexican Stock Exchange on the following terms and conditions:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the acquisition must be carried out through the Mexican Stock Exchange;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the acquisition must be carried out at market price, unless a public offer or auction has been authorized by the CNBV;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the acquisition must be carried out against our net worth (<I>capital contable</I>) without adopting a reduction in capital
stock or against our capital stock, and the shares so acquired will be held as treasury stock without any requirement to adopt
a reduction in capital stock. No shareholder consent is required for such purchases.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the amount and price paid in all share repurchases must be made public;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the annual ordinary shareholders meeting must determine the maximum amount of resources to be used in the fiscal year for the
repurchase of shares;</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>we may not be delinquent on payments due on any outstanding debt issued by us that is registered with the National Securities
Registry; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any acquisition of shares must be in conformity with the requirements of Article 54 of the Mexican Securities Market Law, and
we must maintain a sufficient number of outstanding shares to meet the minimum trading volumes required by the stock markets on
which our shares are listed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The economic and voting rights corresponding
to repurchased shares may not be exercised during the period in which we own such shares, and such shares are not deemed to be
outstanding for purposes of calculating any quorum or vote at any shareholders&rsquo; meeting during such period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The shares and negotiable instruments
representing title to shares belonging to us or, as the case may be, issued but unsubscribed treasury shares, may be placed with
the investing public without the need for a shareholders&rsquo; meeting or board resolution. As such, the provisions of Article
132 of the Mexican Corporations Law do not apply.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Ownership of Capital Stock by Subsidiaries</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our subsidiaries may not, directly or
indirectly, invest in our shares, except for shares acquired as part of an employee stock option plan and in conformity with the
Mexican Securities Market Law.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Delisting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the Mexican Securities Market
Law, in the event that we decide to cancel the registration of our shares in the National Securities Registry and the listing of
our shares on the Mexican Stock Exchange, or if the CNBV orders such cancellation, we will be required to conduct a tender offer
for the shares held by minority shareholders and to create a trust with a term of six months, with amounts sufficient to purchase
all shares not participating in the tender offer. Under the law, our controlling shareholders will be secondarily liable for these
obligations. The price at which the shares must be purchased in the offer must be the greater of (i) the average of the trading
price on the Mexican Stock Exchange during the last 30 days on which the shares were quoted prior to the date on which the tender
offer is made or (ii) the book value of such shares as determined pursuant to our latest quarterly financial information filed
with the CNBV and the Mexican Stock Exchange. If the CNBV orders the cancellation, we must launch the tender offer within 180 days
from the date of their request. If we initiate it, under the Mexican Securities Market Law, the cancellation must be approved by
95% of our shareholders.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other Provisions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Information to Shareholders. </I>The
Mexican Corporations Law establishes that companies, acting through their boards of directors, must annually present a report at
a shareholder&rsquo;s meeting that includes:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a report of the directors on our financial statements, as well as on the policies followed by the directors and on the principal
existing projects;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a report explaining the principal accounting and information policies and criteria followed in the preparation of the financial
information;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a statement of the financial condition of the company at the end of the fiscal year;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a statement showing the results of operations of the company during the preceding year, as well as changes in the company&rsquo;s
financial condition and capital stock during the preceding year;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a report of the chief executive officer on the operations of the company during the preceding year;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a report of the fulfillment of the company&rsquo;s tax obligations of the last fiscal year;</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>a report of the Audit Committee with respect to the preceding year; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the notes which are required to complete or clarify the above mentioned information.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition to the foregoing, our by-laws
provide that our board of directors also should prepare the information referred to above with respect to any subsidiary that represents
at least 20% of our net worth (based on the financial statements most recently available).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Shareholders&rsquo; Conflict of Interest.
</I>Under Mexican law, any shareholder that has a conflict of interest with respect to any transaction must abstain from voting
thereon at the relevant shareholders&rsquo; meeting. A shareholder that votes on a transaction in which its interest conflicts
with ours may be liable for damages in the event the relevant transaction would not have been approved without such shareholder&rsquo;s
vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Liquidation. </I>In the event we are
liquidated, the surplus assets remaining after payment of all our creditors will be divided among our shareholders in proportion
to their respective share holdings. Shares that are only partially paid will participate in the distribution in the proportion
that they were paid. The general extraordinary shareholders&rsquo; meeting at which the liquidation resolution is made, will appoint
one or more liquidators.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Foreign Investment. </I>Ownership
by foreign investors of shares of Mexican enterprises in certain economic sectors is regulated by the Foreign Investment Law and
the regulations thereunder. The Ministry of the Economy and the National Commission on Foreign Investment are responsible for the
administration of the Foreign Investment Law and Regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the Mexican Foreign Investment
Law and Regulations, foreign investors may acquire up to 100% of the capital stock of Mexican companies or entities in the steel
industry. In accordance with our bylaws, Mexican and non-Mexican nationals may own all series of our share capital. We have registered
any foreign owner of our shares, and the depositary with respect to the ADSs representing our shares, with the National Registry
of Foreign Investment <I>(Registro Nacional de Inversi&oacute;n Extranjera)</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Forfeiture of Shares</I>. As required
by Mexican law, our by-laws provide that &ldquo;any alien who at the time of incorporation or at any time thereafter acquires an
interest or participation in the capital of the corporation shall be considered, by virtue thereof, as Mexican in respect thereof
and shall be deemed to have agreed not to invoke the protection of his own government, under penalty, in case of breach of such
agreement, of forfeiture of such interest or participation in favor of the Mexican nation.&rdquo; Under this provision, a non-Mexican
shareholder is deemed to have agreed not to invoke the protection of his own government by asking such government to interpose
a diplomatic claim against the Mexican government with respect to the shareholder&rsquo;s rights as a shareholder but is not deemed
to have waived any other rights it may have, including any rights under the U.S. securities laws, with respect to its investment
in us. If the shareholder invokes such governmental protection in violation of this agreement, its shares could be forfeited to
the Mexican government. Mexican law requires that such a provision be included in the by-laws of all Mexican corporations unless
such by-laws prohibit ownership of shares by non-Mexican persons or entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Duration</I>. Our existence under
our by-laws is indefinite.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Certain Differences between Mexican and U.S. Corporate
Law</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">You should be aware that the Mexican
Corporations Law and the Mexican Securities Market Law, which apply to us, differ in certain material respects from laws generally
applicable to U.S. corporations and their shareholders.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Independent Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Securities Market Law requires
that 25% of the directors of Mexican public companies must be independent, but the Audit Committee must be comprised entirely of
independent directors. Pursuant to the rules and regulations of the New York Stock Exchange, 50% of the directors of listed companies
must be independent,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">and foreign
companies subject to reporting requirements under the U.S. federal securities laws and listed on the New York Stock Exchange must
maintain an audit committee comprised entirely of independent directors as defined in the United States federal securities laws.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mergers, Consolidations, and Similar
Arrangements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A Mexican company may merge with another
company only if a majority of the shares representing its outstanding capital stock approve the merger at a duly convened general
extraordinary shareholders&rsquo; meeting, unless the company&rsquo;s by-laws impose a higher threshold. Dissenting shareholders
are not entitled to appraisal rights. Creditors have ninety days to oppose a merger judicially, provided they have a legal interest
to oppose the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Delaware law, with certain exceptions,
a merger, consolidation, or sale of all or substantially all the assets of a corporation must be approved by the board of directors
and a majority of the outstanding shares entitled to vote thereon. Under Delaware law, a shareholder of a corporation participating
in certain major corporate transactions, under certain circumstances, may be entitled to appraisal rights pursuant to which the
shareholder may receive payment in the amount of the fair market value of the shares held by the shareholder (as determined by
a court) in lieu of the consideration the shareholder would otherwise receive in the transaction. Delaware law also provides that
a parent corporation, by resolution of its board of directors and without any shareholder vote, may merge with any subsidiary of
which it owns at least 90% of each class of share capital. Upon any such merger, dissenting shareholders of the subsidiary would
have appraisal rights.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Anti-Takeover Provisions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Subject to the approval of the CNBV,
the Mexican Securities Market Law permits public companies to include anti-takeover provisions in their by-laws that restrict the
ability of third parties to acquire control of the company without obtaining approval of the company&rsquo;s board of directors.
See &ldquo;Market Information&mdash;Market Regulation&mdash;Anti-Takeover Protections.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Delaware law, corporations can
implement shareholder rights plans and other measures, including staggered terms for directors and super-majority voting requirements,
to prevent takeover attempts. Delaware law also prohibits a publicly-held Delaware corporation from engaging in a business combination
with an interested shareholder for a period of three years after the date of the transaction in which the shareholder became an
interested shareholder unless:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>prior to the date of the transaction in which the shareholder became an interested shareholder, the board of directors of the
corporation approves either the business combination or the transaction that resulted in the shareholder becoming an interested
shareholder;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder
owns at least 85% of the voting stock of the corporation, excluding shares held by directors, officers, and employee stock plans;
or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>at or after the date of the transaction in which the shareholder became an interested shareholder, the business combination
is approved by the board of directors and authorized at a shareholders&rsquo; meeting by at least 66<SUP>2</SUP>/3% of the voting
stock which is not owned by the interested shareholder.</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shareholders&rsquo; Suits</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the Mexican Securities Market
Law, only a shareholder or group of shareholders holding at least 5% of our outstanding shares may bring a claim against some or
all of our directors, secretary of the board of directors or relevant executives for violation of their duty of care or duty of
loyalty. In addition, such shareholder or group of shareholders must include in its claim the amount of damages or losses caused
to the company and not only the damages or losses caused to the shareholder or group of shareholders bringing the claim, provided
that any amount recovered as indemnification arising from the liability action will be for the benefit of the company, and not
for the benefit of the shareholder or group of shareholders. The shareholder or group or shareholders must</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">demonstrate
the direct and immediate link between the damage or loss caused to the company, and the acts alleged to have caused it. There
is no requirement for the shareholder or group of shareholders to hold the shares for a certain period of time in order to bring
a claim.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">If the court determines that the shareholder
or group of shareholders that initiated the claim acted in bad faith, such shareholder or group of shareholders will be liable
to pay the legal fees and legal proceeding expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The statute of limitations for these
actions is five years from the date on which the act or event that caused the damage or loss occurred. These actions must be brought
in the federal or local courts in Guadalajara, Jalisco (Mexico) and the court must personally notify the parties that have been
sued, and must comply with all other legal formalities in order to satisfy the due process requirements of the Mexican Constitution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Process must be served on the defendant
personally, or, in the defendant&rsquo;s absence, process can be served by a judicial officer on the defendant&rsquo;s domicile
whether or not the defendant is present. A method of service that does not comply with these requirements could be considered void.
Class action lawsuits are not permitted under Mexican law.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shareholder Proposals</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law and our by-laws, holders
of at least 10% of our outstanding capital stock are entitled to appoint one member of our board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Delaware law does not include a provision
restricting the manner in which nominations for directors may be made by shareholders or the manner in which business may be brought
before a meeting.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Calling of Special Shareholders&rsquo;
Meetings</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law and our by-laws, the
board of directors, the chairman of the board of directors or the chairman of the Audit Committee may call a shareholders&rsquo;
meeting. Any shareholder or group of shareholders with voting rights representing at least 10% of our capital stock may request
that the chairman of the board of directors or the Audit Committee call a shareholders&rsquo; meeting to discuss the matters indicated
in the written request. If the chairman of the board of directors or the chairman of the Audit Committee fails to call a meeting
within 15 calendar days following date of the written request, the shareholder or group of shareholders may request that a competent
court call the meeting. A single shareholder may call a shareholders&rsquo; meeting if no meeting has been held for two consecutive
years or if matters to be dealt with at an ordinary shareholders&rsquo; meeting have not been considered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Delaware law permits the board of directors
or any person who is authorized under a corporation&rsquo;s certificate of incorporation or by-laws to call a special meeting of
shareholders.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Cumulative Voting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, cumulative voting
for the election of directors is permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Delaware law, cumulative voting
for the election of directors is permitted if expressly authorized in the certificate of incorporation.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Staggered Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexican law does not permit companies
to have a staggered board of directors, while Delaware law does permit corporations to have a staggered board of directors.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Approval of Corporate Matters
by Written Consent</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexican law permits shareholders to take
action by unanimous written consent of the holders of all shares entitled to vote. These resolutions have the same legal effect
as those adopted in a general or special shareholders&rsquo; meeting. The board of directors may also approve matters by unanimous
written consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Delaware law permits shareholders to
take action by written consent of holders of outstanding shares having more than the minimum number of votes necessary to take
the action at a shareholders&rsquo; meeting at which all voting shares were present and voted.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Amendment of Certificate of Incorporation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, it is not possible
to amend a company&rsquo;s certificate of incorporation (<I>acta constitutiva</I>). However, the provisions that govern a Mexican
company are contained in its by-laws, which may be amended as described below. Under Delaware law, a company&rsquo;s certificate
of incorporation generally may be amended by a vote of holders of a majority of the outstanding stock entitled to vote thereon
(unless otherwise provided in the certificate of incorporation), subsequent to a resolution of the board of directors proposing
such amendment.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Amendment of By-laws</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, amending a company&rsquo;s
by-laws requires shareholder approval at an extraordinary shareholders&rsquo; meeting. Mexican law requires that at least 75% of
the shares representing a company&rsquo;s outstanding capital stock be present at the meeting in the first call (unless the by-laws
require a higher threshold) and that the resolutions be approved by a majority of the shares representing a company&rsquo;s outstanding
capital stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Delaware law, holders of a majority
of the outstanding stock entitled to vote and, if so provided in the certificate of incorporation, the directors of the corporation,
have the power to adopt, amend, and repeal the by-laws of a corporation.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Material Contracts</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>Exchange Control</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">There are no legislative or legal provisions
currently in force in Mexico or arising under our by-laws restricting the payment of dividends to holders of our common stock not
resident in Mexico, except for regulations restricting the remittance of dividends and other payments in compliance with United
Nations sanctions. There are no limitations, either under the laws of Mexico or in our by-laws, on the right of foreigners to hold
or vote on shares of our common stock.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">E.</FONT></TD><TD>Taxation</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following summary contains a description
of the material anticipated U.S. and Mexican federal income tax consequences of the purchase, ownership and disposition of the
series B shares or ADSs by a holder that is a citizen or resident of the United States or a U.S. domestic corporation or that otherwise
will be subject to U.S. federal income tax on a net income basis in respect of the series B shares or ADSs and that is a &ldquo;non-Mexican
holder&rdquo; (as defined below) (a &ldquo;U.S. holder&rdquo;), but it does not purport to be a comprehensive description of all
of the tax considerations that may be relevant to a decision to purchase the series B shares or ADSs. In particular, the summary
deals only with U.S. holders that will hold the series B shares or ADSs as capital assets and use the U.S. dollar as their functional
currency and does not address the tax treatment of a U.S. holder that owns or is treated as owning 10% or more of our outstanding
voting shares. In addition, the summary does not address any U.S. or Mexican state or local tax considerations that may be relevant
to U.S. holders that are subject to special tax rules, such as banks, securities dealers, insurance companies, tax-exempt entities,
persons that hold ADSs or series B shares as a hedge or as part of a straddle, conversion transaction or other risk reduction transaction
for tax purposes or partnerships or pass-through entities for U.S. federal income tax purposes. If a partnership holds the series
B shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and the activities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">of the
partnership. If a U.S. holder is a partner of a partnership holding our series B shares or ADSs, such U.S. holder should consult
its tax advisor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The summary is based upon the federal
income tax laws of the United States and Mexico as in effect on the date of this annual report, including the provisions of the
income tax treaty between the United States and Mexico and protocol thereto (the &ldquo;Tax Treaty&rdquo;), all of which are subject
to change, possibly with retroactive effect in the case of U.S. federal income tax law. Prospective investors in the series B shares
or ADSs should consult their own tax advisors as to the U.S., Mexican or other tax consequences of the purchase, ownership and
disposition of the series B shares or ADSs, including, in particular, the effect of any foreign, state or local tax laws and their
entitlement to the benefits, if any, afforded by the Tax Treaty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">For purposes of this summary, the term
&ldquo;non-Mexican holder&rdquo; shall mean a holder that is not a resident of Mexico and that will not hold the series B shares
or ADSs or a beneficial interest therein in connection with the conduct of a trade or business through a permanent establishment
or fixed base in Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">An individual is a resident of Mexico
for tax purposes, if he established his home in Mexico. When the individual in question has a home in another country, the individual
will be deemed a resident in Mexico if his &ldquo;center of vital interests&rdquo; is located in Mexico. This will be deemed to
occur if (i) more than 50% of the aggregate income realized by such individual in the calendar year is from a Mexican source or
(ii) the principal center of his professional activities is located in Mexico.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A Mexican national who files a change
of tax residence notice with a country or jurisdiction that does not have a comprehensive exchange of information agreement with
Mexico and in which his income is subject to a preferred tax regime pursuant to the provisions of the Mexican Income Tax Law, will
be considered a Mexican resident for tax purposes during the year the notice is filed and during the following three years. Unless
otherwise proven, a Mexican national is deemed a resident of Mexico for tax purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">An entity in Mexico is a resident of
Mexico if it maintains its principal place of business or its place of effective management in Mexico. If non-residents of Mexico
are deemed to have a permanent establishment in Mexico for tax purposes, all income attributable to the permanent establishment
will be subject to Mexican taxes, in accordance with applicable Mexican tax law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In general, for U.S. federal income tax
purposes, holders of ADSs will be treated as the beneficial owners of the series B shares represented by those ADSs.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Taxation of Dividends</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexican Tax Considerations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican Income Tax Law provisions
(<I>Ley del Impuesto Sobre la Renta</I>), dividends paid to non-Mexican holders with respect to the series B shares represented
by the ADSs are not subject to Mexican withholding tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Dividends paid from distributable earnings
that have not been subject to corporate income tax are subject to a corporate-level dividend tax at a rate of 38.89% for the year
ended December 31, 2009 and 42.86% for 2010 and 2011. The corporate-level dividend tax on the distribution of earnings is not final
and may be credited against income tax payable during the fiscal year in which the dividend tax was paid and for the following
two years. Dividends paid from distributable earnings, after corporate income tax has been paid with respect to these earnings,
are not subject to this corporate-level dividend tax. Currently, after corporate tax dividend distributions are not subject to
individual withholding taxes for shareholder recipients thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Distributions made by us to our shareholders
other than as dividends, including capital reductions, amortization of shares or otherwise, would be subject to taxation in Mexico
at the corporate rate of 30% in 2010, or at the rate mentioned above, as the case may be.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">U.S. Federal Income Tax Considerations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The gross amount of any distributions
paid with respect to the series B shares represented by the ADSs, to the extent paid out of our current or accumulated earnings
and profits, as determined for U.S. federal income tax purposes, will be taxable as dividends and generally will be includible
in the gross income of a U.S. holder as ordinary income on the date on which the distributions are received by the depositary and
will not be eligible for the dividends received deduction allowed to certain corporations under the U.S. Internal Revenue Code
of 1986, as amended. Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received
by an individual prior to January 1, 2013 with respect to the B shares and ADSs will be subject to taxation at a maximum rate of
15% if the dividends are &ldquo;qualified dividends.&rdquo; Dividends paid on the B shares and ADSs will be treated as qualified
dividends if (i) the issuer is eligible for the benefits of a comprehensive income tax treaty with the United States that the IRS
has approved for the purposes of the qualified dividend rules, and (ii) we were not, in the year prior to the year in which the
dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (&ldquo;PFIC&rdquo;).
The income tax treaty between Mexico and the United States has been approved for the purposes of the qualified dividend rules.
Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC
for U.S. federal income tax purposes with respect to our 2010 or our 2011 taxable year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">To the extent that a distribution exceeds
our current and accumulated earnings and profits, it generally will be treated as a non-taxable return of basis to the extent thereof,
and thereafter as capital gain from the sale of series B shares or ADSs. We do not expect to keep earnings and profits in accordance
with U.S. federal income tax principles. Therefore, a U.S. holder should expect that a distribution will generally be treated as
a dividend (as discussed above).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Distributions, which will be made in
pesos, will be includible in the income of a U.S. holder in a U.S. dollar amount calculated by reference to the exchange rate in
effect on the date they are received by the depositary whether or not they are converted into U.S. dollars. U.S. holders should
consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any pesos received that are
converted into U.S. dollars on a date subsequent to receipt. Dividend income generally will constitute foreign source &ldquo;passive
category income&rdquo; or, in the case of certain U.S. holders, &ldquo;general category income&rdquo; for U.S. foreign tax credit
purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Distributions of additional series B
shares to holders of ADSs with respect to their ADSs that are made as part of a pro rata distribution to all our stockholders generally
will not be subject to U.S. federal income tax.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Taxation of Dispositions of Shares or ADSs</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexican Tax Considerations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Gain on the sale or other disposition
of ADSs by a U.S. holder will generally not be subject to Mexican tax. Deposits and withdrawals of series B shares in exchange
for ADSs will not give rise to Mexican tax or transfer duties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Gain on the sale of series B shares by
a U.S. holder will not be subject to any Mexican tax if the transaction is carried out through the Mexican Stock Exchange or other
stock exchange or securities markets approved by the Mexican Ministry of Finance and Public Credit. Gain on sales or other dispositions
of series B shares made in other circumstances generally would be subject to Mexican tax at a rate of 25% based on the total amount
of the transaction or, subject to certain requirements applicable to the seller, at a rate of 28% for the year ended December 31,
2009 and 30% by 2010, 2011 and 2012 of gains realized from the disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under the Tax Treaty, a U.S. holder that
is eligible to claim the benefits of the Tax Treaty will be exempt from Mexican tax on gains realized on a sale or other disposition
of series B shares, in a transaction that is not carried out through the Mexican Stock Exchange or such other approved securities
markets, so long as the holder did not own, directly or indirectly, 25% or more of our share capital (including ADSs) during the
twelve-month period preceding the sale or other disposition, and the value of those shares does not derive mainly from immovable
property located in Mexico. Specific formalities apply to claim such as treaty benefits.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">U.S. Federal Income Tax Considerations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Upon the sale or other disposition of
the series B shares or ADSs, a U.S. holder generally will recognize U.S. source capital gain or loss in an amount equal to the
difference between the amount realized on the sale or other disposition and such U.S. holder&rsquo;s tax basis in the series B
shares or ADSs. Gain or loss recognized by a U.S. holder on such sale or other disposition generally will be long-term capital
gain or loss if, at the time of the sale or other disposition, the series B shares or ADSs have been held for more than one year.
Under current law, long-term capital gain recognized by a U.S. holder that is an individual generally is subject to a maximum federal
income tax rate of 15%. The deduction of a capital loss is subject to limitations for U.S. federal income tax purposes. Deposits
and withdrawals of series B shares by U.S. holders in exchange for ADSs will not result in the realization of gain or loss for
U.S. federal income tax purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A U.S. holder that receives pesos upon
sale or other disposition of the series B shares will realize an amount equal to the U.S. dollar value of the pesos upon the date
of sale (or in the case of cash basis and electing accrual basis taxpayers, the settlement date). A U.S. holder will have a tax
basis in the pesos received equal to the U.S. dollar value of the pesos received translated at the same rate the U.S. holder used
to determine the amount realized on its disposal of the series B shares. Any gain or loss realized by a U.S. holder on a subsequent
conversion of the pesos generally will be a U.S. source ordinary income or loss.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other Mexican Taxes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">There are no Mexican inheritance, gift,
succession or value added taxes applicable to the ownership, transfer or disposition of the series B shares or ADSs by non-Mexican
holders; provided, however, that gratuitous transfers of the series B shares or ADSs may in certain circumstances cause a Mexican
federal tax to be imposed upon the recipient. There are no Mexican stamp, issue, registration or similar taxes or duties payable
by non-Mexican holders of the series B shares or ADSs.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">U.S. Backup Withholding Tax and Information Reporting
Requirements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In general, information reporting requirements
will apply to certain payments by a paying agent to a U.S. holder of dividends in respect of the series B shares or ADSs or the
proceeds received on the sale or other disposition of the series B shares or ADSs, and a backup withholding tax may apply to such
amounts if the U.S. holder fails to provide an accurate taxpayer identification number to the paying agent or fails to establish
an exemption or otherwise comply with these provisions. Amounts withheld as backup withholding tax will be creditable against the
U.S. holder&rsquo;s U.S. federal income tax liability, provided that the required information is furnished to the U.S. Internal
Revenue Service.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">F.</FONT></TD><TD>Dividends and Paying Agents</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">G.</FONT></TD><TD>Statements by Experts</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">H.</FONT></TD><TD>Documents on Display</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Statements contained in this annual report
regarding the contents of any contract or other document are not necessarily complete, and, where the contract or other document
is an exhibit to the annual report, each of these statements is qualified in all respects by the provisions of the actual contract
or other documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are subject to the informational requirements
of the U.S. Securities Exchange Act of 1934, or the Exchange Act. Accordingly, we file reports and other information with the Commission,
including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy the reports and other information that
we file with the Commission at the public reference facilities of the Commission at 100 F. Street, N.E., Washington D.C. 20549.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">You may
obtain information on the operation of the Commission&rsquo;s public reference room by calling the Commission in the United States
at 1-800-SEC-0330. In addition, the Commission maintains an internet website at <I>www.sec.gov </I>from which you can electronically
access this annual report and the other materials that we file with the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As a foreign private issuer, we are not
subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act. For example, we are not required
to prepare and issue quarterly reports. However, we are required to file with the Commission, promptly after it is made public
or filed, information that we make public in Mexico, file with the Mexican Stock Exchange or the CNBV or distribute to our security
holders. As a foreign private issuer, we are exempt from Exchange Act rules regarding proxy statements and short-swing profits.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">I.</FONT></TD><TD>Subsidiary Information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_013"></A> <FONT STYLE="color: #010000">11.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Quantitative and Qualitative Disclosures About Market Risk</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are exposed to market risk, which
is the potential risk of loss in fair values, cash flows or earnings due to changes in interest rates and foreign currency rates
(primarily the peso/dollar exchange rate), as a result of our holdings of financial instrument positions. Our financial instruments
include cash and cash equivalents, trade and other accounts receivable, accounts payable, long-term debt securities and related
party debt. We do not maintain a trading portfolio. Our borrowings are entirely denominated in U.S. dollars. We do not utilize
derivative financial instruments to manage our market risks with respect to our financial instruments. Historically, based on the
last ten years of data, inflation in Mexico has been 2% higher than the Mexican peso&rsquo;s devaluation relative to the dollar.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are exposed to market risk due to
fluctuations of the purchase price of natural gas. To limit our exposure, we use derivative financial instruments, which currently
consist of natural gas swap contracts. These contracts are recognized on our balance sheet at fair value. The swaps are considered
as cash flow hedges since the cash flow exchanges under the swap are highly effective in mitigating exposure to natural gas price
fluctuations. The change in fair value of the swaps is recorded as part of comprehensive income in stockholders&rsquo; equity for
those contracts that are designated as accounting hedges until such time as the related item hedged is recorded in income. At that
time, the hedging instrument&rsquo;s fair value is recorded in income. For those contracts that are not designated as accounting
hedges, the change in fair value is recorded directly into income. We do not believe our market risk with respect to these natural
gas futures contracts is material. See Note 13 to the consolidated financial statements.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Market Risk Measurement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We measure our market risk related to
our financial instruments based on changes in interest rates and foreign currency rates utilizing a sensitivity analysis. The sensitivity
analysis measures the potential loss in fair values, cash flows and earnings based on a hypothetical increase in interest rates
and a decline in the peso/dollar exchange rate. We used market rates as of December 31, 2011 on our financial instruments to perform
the sensitivity analysis. We believe that these potential changes in market rates are reasonably possible in the near-term (one
year or less). Based upon our analysis of the impact of a 100 basis point increase in interest rates and a 10% decline in the peso/dollar
exchange rate, we have determined that such increase in interest rates and such decline in the peso/dollar exchange rate would
not have a material adverse effect on our earnings. Because there is no active trading market for our debt instruments, we are
not able to determine the impact of these changes on the fair value of those debt instruments. The sections below describe our
exposure to interest rates and currency rates including the impact of changes in these rates on our earnings.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Interest Rate Exposure</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are exposed to changes in short-term
interest rates as we invest in short-term dollar-denominated interest bearing investments. On the liability side, we utilize fixed
rate debt. The floating rate debt is exposed to changes in interest expense and cash flows from changes in LIBOR, while the fixed
rate debt is mostly exposed to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">changes
in fair value from changes in medium term interest rates. Based on an immediate 100 basis point rise in interest rates, we estimate
that our earnings before taxes would not be significantly affected.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Currency Rate Exposure</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our primary foreign currency exchange
rate exposure relates to our debt securities as well as our dollar-denominated trade payables. Our principal currency exposure
is to changes in the peso/dollar exchange rate. We estimate that a 10% decline in the peso/dollar exchange rate would result in
a decrease in our earnings before taxes of approximately Ps. 0.4 million (U.S.$30 thousand).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The sensitivity analysis is an estimate
and should not be viewed as predictive of our future financial performance. Additionally, we cannot assure that our actual losses
in any particular year will not exceed the amounts indicated above. However, we do believe that these amounts are reasonable based
on the financial instrument portfolio at December 31, 2011 and assuming that the hypothetical market rate changes selected by us
in our market risk analysis occur during 2012. The sensitivity analysis does not give effect to the impact of inflation on its
exposure to increases in interest rates or the decline in the peso/dollar exchange rate.</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B> <FONT STYLE="color: #010000">12.<FONT STYLE="font: 7pt Times New Roman, Times, Serif"><A NAME="a_014"></A>
</FONT></FONT>Description of Securities Other than Equity Securities</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Debt Securities</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Warrants and Rights</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Other Securities</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>American Depositary Shares</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">12.D.3. American Depositary Shares</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Bank of New York Mellon serves as
the depositary for our ADSs. The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing
shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees
for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable
property to pay the fees. The depositary may collect its annual fee for depositary services by deductions from cash distributions
or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary
may generally refuse to provide fee-attracting services until its fees for those services are paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">ADS holders are also required to pay
additional fees for certain services provided by the depositary, as set forth in the table below.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 58%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt; font-weight: bold">Depositary service</TD>
    <TD STYLE="width: 42%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt; font-weight: bold">Fee payable by ADR holders</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Issuance and delivery of ADSs, including issuances resulting from a distribution of shares or rights or other property</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Up to US$ 5.00 per 100 ADSs (or portion thereof)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Up to US$ 5.00 per 100 ADSs (or portion thereof)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for </TD></TR>
</TABLE>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; padding: 1.45pt 5.75pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding: 1.45pt 5.75pt; border-top: Black 1pt solid"> issuance of ADSs</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt; width: 58%">Registration for the transfer of shares</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt; width: 42%">Registration or transfer fees that may from time to time be in effect</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Cash distribution fees</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">US$.02 or less per ADS</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">Depositary services</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">US$.02 or less per ADS</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, holders may be required
to pay a fee for the distribution or sale of securities. Such fee (which may be deducted from such proceeds) would be for an amount
equal to the lesser of (1) the fee for the issuance of ADSs that would be charged as if the securities were treated as deposited
shares and (2) the amount of such proceeds.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">12.D.4 Direct And Indirect Payments By The Depositary</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Fees Incurred in Past Annual Period</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We did not receive any reimbursement
from the depositary in 2011 or 2010.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Fees to be Paid in the Future</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Bank of New York Mellon, as depositary,
has agreed to reimburse us for expenses they incur that are related to establishment and maintenance expenses of the ADS program.
The depositary has agreed to reimburse us for its continuing annual stock exchange listing fees. The depositary has also agreed
to pay the standard out-of-pocket maintenance costs for the ADSs, which consist of the expenses of postage and envelopes for mailing
annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information,
mailing required tax forms, stationery, postage, facsimile, and telephone calls. It has also agreed to reimburse us annually for
certain investor relationship programs or special investor relations promotional activities. In certain instances, the depositary
has agreed to provide additional payments to us based on any applicable performance indicators relating to the ADS facility. There
are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us
is not necessarily tied to the amount of fees the depositary collects from investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The depositary collects its fees for
delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or
from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees
from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its
annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry
system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its
fees for those services are paid.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman Bold,serif; color: #010000"><A NAME="a_015"></A>PART
II</FONT>&nbsp;</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_016"></A> <FONT STYLE="color: #010000">13.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Defaults, Dividends Arrearages and Delinquencies</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None.</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_017"></A> <FONT STYLE="color: #010000">14.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Material Modifications to the Rights of Security Holders and Use of Proceeds</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None.</P>

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<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_018"></A> <FONT STYLE="color: #010000">15.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Controls and Procedures</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman Bold; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Disclosure Control and Procedures</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our principal executive officer and our
principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rule 13a-15(e)) as of the end of the period covered by this annual report, have concluded that, as of such date, our disclosure
controls and procedures were not effective as described in Item 15.B.</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">B.</FONT></TD><TD>Management&rsquo;s Annual Report on Internal Control over Financial Reporting</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our management is responsible for establishing
and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal
control system is designed to provide reasonable assurance as to the reliability of the published financial statements under applicable
generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurances
with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness of the internal
control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The effectiveness of our internal control
over financial reporting as of December 31, 2011 has been audited by BDO, an independent registered public accounting firm, as
stated in their report which appears in Item 15.C as required by item 15.B(4) of Form 20-F.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our management assessed the effectiveness
of our internal control over financial reporting as of December 31, 2010. In making this assessment, it used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control &ndash; Integrated Framework.
Based on its assessment and those criteria, our management identified the following material weaknesses in our internal control
over financial reporting, and therefore determined that our internal controls
over financial reporting were not effective at December 31, 2011.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Material Weaknesses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A deficiency in internal control over
financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course
of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a deficiency,
or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet
important enough to merit attention by those responsible for the oversight of the company's financial reporting. A material weakness
is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected
on a timely basis.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following material weaknesses with
respect to our internal controls over financial reporting were identified by us and our external auditors:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Due to the growth of our operations in Mexico primarily as a result of our acquisition in May 2008 of Aceros DM, the structure
of our finance department proved to be insufficient insofar as it did not allow for adequate segregation of duties with respect
to the supervision and review procedures for the assessment of deferred taxes and for the closing of our financial statements;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>The personnel of our finance department lacked the requisite level of knowledge and specialization to calculate asset impairments
and conversion between MFRS and U.S. GAAP and the conversion of the financial statements of our foreign subsidiaries to MFRS;</TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Our growth also had an adverse impact on our ability to maintain adequate control over our preparation of consolidated financial
information which has become more complex. The preparation of consolidated financial information was carried out through the use
of electronic Excel sheets and a partially integrated system which relied on the use of different software by various subsidiaries,
rather than through a company-wide, integrated consolidation system. Due to this and the other reasons described above, we failed
to undertake a proper supervision of the consolidation process during 2009;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Although, in accordance with MFRS we record revenues when materials have been shipped and the risk is transferred to the customers,
we invoiced in Mexico certain materials that were paid for in 2009 but not shipped until 2010. This occurred due to a failure of
a manual key control regarding our revenue recognition process; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>In the course of the audit of the consolidated financial statements of SimRep and its subsidiaries, including Republic, for
the year ended December 31, 2009 and of internal control over financial reporting as of December 31, 2009, our external auditor
identified certain accounting entries that it concluded were not in compliance with U.S. GAAP.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, on April 29, 2010, our external
auditor notified our audit and corporate practices committee (&ldquo;Audit Committee&rdquo;) and certain members of the management
of Republic that it had identified, during its audit of the financial statements of SimRep and its subsidiaries for the year ended
December 31, 2009, what it considered, under standards established by the Public Company Accounting Oversight Board, to be material
weaknesses in internal control over financial reporting at the SimRep evaluation level. Specifically, our external auditor noted
material weaknesses with regard to what it characterized as &ldquo;management override of internal controls&rdquo; and identified
five specific &ldquo;management overrides.&rdquo; In addition, our external auditor also noted material weaknesses in internal
control over financial reporting with regard to SimRep&rsquo;s adherence to its written policies with regard to accounting for
working capital and fixed asset accounts.</P>


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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2010</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In our assessment of our internal controls over
financial reporting for the year ended December 31, 2010, the following material weaknesses were identified by us and our external
auditors:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 57.6pt"></TD><TD STYLE="width: 14.25pt"><FONT STYLE="font-family: Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD><TD STYLE="text-align: justify; padding-right: 0.8in">Regarding the entity-level controls and control environment, there are
                                                                                                                                                                                                                significant deficiencies that together constitute a material weakness, including (i) ineffective controls in the business
                                                                                                                                                                                                                acquisition process and controls in our patents registry; (ii) insufficient
                                                                                                                                                                                                                resources and an inadequate delegation of duties resulting in many functions being centralized in just few persons; (iii) lack
                                                                                                                                                                                                                of up-to-date accounting, human resources and information technology policies and procedures, and inadequate implementation
                                                                                                                                                                                                                of the foregoing; and (iv) an inadequate implementation and knowledge among employees of our ethical code.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 57.6pt"></TD><TD STYLE="width: 14.25pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0.8in">A lack of appropriate accounting resources during 2010 at the corporate office,
which affected the operation of key supervision controls of the accounting department which, in turn, affected the financial statement
closing process, the deferred income tax process, the U.S. GAAP reconciliation process and the conversion of foreign subsidiaries
process. This material weakness resulted in some accounting errors during 2010. The total accounting errors adjusted for this matter
were considered material to our consolidated financial statements.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 57.6pt"></TD><TD STYLE="width: 14.25pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0.8in">A lack of an appropriate consolidation system to allow management to properly
supervise the preparation of consolidated financial information.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 57.6pt"></TD><TD STYLE="width: 14.25pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0.8in">At SimRep and its subsidiaries, the structure of the finance department was
found to be insufficient to reconcile certain balance sheet accounts and timely review and approve financial close processes including
the preparation of its financial statements, resulting in material corrections to the company&rsquo;s consolidated financial statements.</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On January 12, 2012, our Audit Committee
received a formal complaint from the General Accounting and Treasury Services Manager of Republic, stating that he had identified,
during his review of the financial statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">of SimRep
and its subsidiaries for the year ended December 31, 2011, what he considered to be material accounting errors, and potential
&ldquo;management override of internal controls&rdquo; at SimRep. In response, our Audit Committee instructed our internal audit
department to perform a review, and subsequently engaged outside counsel to conduct an internal investigation concerning the accounting
matters and potential management overrides of internal controls at SimRep. As a result of our investigation, we have identified
material weakness at SimRep, finding that, with respect to SimRep and its subsidiaries, management did not design and maintain
effective controls relating to the year-end closing and financial reporting process, resulting in accounting errors with respect
to the reconciliation of certain balance sheet accounts, and a failure to timely review and control the preparation and closing
of SimRep&rsquo;s consolidated financial statements. In addition, SimRep also had insufficient personnel resources and technical
accounting and reporting expertise to appropriately address certain accounting and financial reporting matters in accordance with
generally accepted accounting principles. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, our external auditors notified
our management that, during their audit of our consolidated financial statements for the year ended December 31, 2011, it identified
what it considered to be, under standards established by the Public Company Accounting Oversight Board, material weaknesses in
internal controls over financial reporting:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Significant deficiencies were detected regarding entity-level controls and control environment which, in the aggregate, constitute
a material weakness, and which include (i) ineffective controls in the patents registry; (ii) inadequate resources and inadequate
distribution of duties among personnel, resulting in too many functions centralized among too few personnel; (iii) out-of-date
accounting and human resources policies and information technology procedures, and a lack of proper monitoring of the foregoing;
(iv) a lack of adequate implementation of our ethical code; (v) failure to integrate all control processes into an Enterprise Resource
Planning (ERP) system; (vi) a lack of an accounting manual (including instructions on accounting recordkeeping) for the entire
company; (vii) failure to create and implement a training plan for management personnel preparing financial records; and (viii)
failure of audit personnel to report periodically to the Audit Committee in order to monitor the remediation procedures previously
adopted with respect to previous accounting periods;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>A lack of appropriate accounting resources, which led to inadequate supervision and controls within the accounting department
and therefore prejudiced the financial statement closing process, the deferred income tax process and the conversion of foreign
subsidiaries process, resulting in material accounting errors;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>A lack of an appropriate consolidation system to allow management to supervise properly the preparation of consolidated financial
information. Financial information of subsidiaries was presented at a level of detail that was insufficient to allow for a clear
and precise understanding of operations; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>A lack of appropriate accounting resources at SimRep, which led to material weaknesses with respect to SimRep&rsquo;s internal
controls over financial reporting, which resulted in material corrections to its consolidated financial statements. Such material
weaknesses included: (i) a lack of proper controls to reconcile certain balance sheet accounts at a detailed level, including certain
accounts payable debit balances that could not be substantiated, resulting in audit adjustments; (ii) financial close control failure
due to lack of timely review of monthly financial statements; (iii) a necessity to perform several reclassifications to basic financial
statements and adjustments to the footnotes after the auditors&rsquo; review of such financial statements; and (iv) a lack of appropriate
expertise at SimRep to address technical accounting and financial reporting matters.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-size: 10pt">Significant deficiencies were also detected at our subsidiary Corporaci&oacute;n Aceros DM, S.A.
de C.V. which, in the aggregate constitute a material weakness, these significant deficiencies include (i) lack of physical inventory
of fixed assets; (ii) lack of proper segregation of duties, analysis and authorization of personnel access to main information
systems; (iii) lack of evidence of reconciliation of physical and accounting information of raw material inventory; (iv) lack of
evidence of review of interim financial statements; and (v) failure to document and communicate adequately responsibilities and
authority of key financial roles.</FONT></TD></TR></TABLE>



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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Attestation Report of the Independent Registered Public Accounting Firms</TD></TR></TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Report of Independent Registered
Public Accounting Firm<BR>
To The Board of Directors and Shareholders of Grupo Simec, S.A.B. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">We have audited Grupo Simec, S.A.B.
de C.V.&rsquo;s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control
&ndash; Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria).
Grupo Simec, S.A.B. de C.V.&rsquo;s management is responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management&rsquo;s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company&rsquo;s
internal control over financial reporting based on our audit. We did not examine the effectiveness of internal control over financial
reporting of the subsidiaries included in the combined financial statements of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and
subsidiaries and affiliates, wholly owned subsidiaries, which total combined assets represent approximately 10% of the total consolidated
assets as of December 31, 2011 and its net combined sales for the year then ended represented approximately a 11% of the total
net consolidated sales. The effectiveness of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries and affiliates internal
control over financial reporting was audited by other auditors whose report has been furnished to us and expressed an qualified
opinion. Our opinion, insofar as it relates to the effectiveness of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries
and affiliates internal control over financial reporting, is based solely on the report of the other auditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit and the report of the other auditors provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">A company&rsquo;s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles. A company&rsquo;s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company&rsquo;s assets that could have a material effect on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the company&rsquo;s annual or interim financial statements will not be prevented or detected on a timely basis. The following
material weaknesses have been identified and included in management&rsquo;s assessment:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">(1) Regarding the entity-level controls and control environment,
there are significant deficiencies that could affect the effectiveness of the internal controls:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- We noted ineffective controls in the patents registry.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.4pt"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- Many functions are centralized in just few persons. These issues
are attributable to the lack of appropriate resources and an adequate analysis of segregation of duties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- We noted that the accounting, human resources policies and information
technology and procedures have been only partially updated and there is no proper monitoring by the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- As part of evaluation the control environment, we noted lack of
adequate diffusion of the ethical code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- The Company has not integrated all the control processes of the
entity to an Enterprise Resource Planning (ERP).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- The Company does not have an accounting manual for the entire
company, including the instructions on most types of accounting records.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- During the year ended December 31, 2011, the Company does not
have evidence of having carried out a training plan for management personnel conducting the preparation of the Financial Information.
On the other hand, has no evidence of a training plan for this area.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- Internal Audit has no evidence to report periodically to the Audit
Committee for monitoring the remediation plans previously submitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">The combination of these deficiencies constitute a material weakness,
there are a reasonable possibility that material misstatement of the company's annual and interim financial statements will not
be prevented or detected on a timely basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">(2) Lack of appropriate accounting resources during 2011 at the
corporate office that affected the operation of key supervision controls of the accounting department that, in turn, affected the
financial statement closing process, the deferred income tax process and the conversion of foreign subsidiaries process. This material
weakness resulted in some accounting errors during 2011. The total accounting errors adjusted for this matter were considered material
to the consolidated financial statements of Grupo Simec, S.A.B. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">(3) Lack of appropriate consolidation system to allow management
to properly supervise the preparation of consolidated financial information. In addition, the financial information of each of
the business units that provides a basis for the consolidation does not have enough depth analysis. Consequently the preparation
of the figures of the consolidation is complex because there is not enough detail to allow carrying out a clear and precise understanding
of the operations contained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">(4) In the subsidiary SimRep Corporation and its subsidiaries are
material weaknesses affecting the effectiveness of internal controls that are mentioned below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0">- We noted the Company lacks proper controls in place to reconcile
certain balance sheet accounts at the detailed level. Specifically, the Company has certain accounts payable debit balances that
could not be substantiated resulting in audit adjustments. Our testing of internal controls revealed a financial close control
failure due to lack of proper and timely review of monthly financial statements. In addition, our review of the financial statements
resulted in several reclassifications to the basic financial statements and adjustments to the footnotes. We also noted the Company
did not have appropriate expertise internally to address technical accounting and financial reporting matters. These issues are
attributable to the Company&rsquo;s lack of appropriate accounting resources. This material weakness resulted in material corrections
to the Company&rsquo;s consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">These material weaknesses were considered in
determining the nature, timing and extent of audit tests applied in our audit of 2011 financial statements and this report does
not affect our report dated April 25, 2012 on those financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-indent: 35.4pt">In our opinion, Grupo Simec, S.A.B.
de C.V. did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2011,
based on the COSO criteria.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0pt; text-indent: 0.5in">The other auditors issued also an adverse
opinion of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries and affiliates, noting that significant deficiencies
were detected on Corporacion Aceros D.M., S.A. de C.V. which, in the aggregate, constitute a material weakness, these significant
deficiencies include (i) lack of physical inventory of fixed assets; (ii) lack of proper segregation of duties analysis and authorization
of personnel access to main information systems; (iii) lack of evidence of reconciliation of physical and accounting information
of the raw material inventory; (iv) lack of evidence of review of interim financial statements; and (v) failure to document and
communicate adequately responsibilities and authority of key financial roles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0pt; text-indent: 35.4pt">We also have audited, in accordance with the
standards of the Public Company Accounting Oversight Board (United States of America), the consolidated balance sheet of Grupo
Simec, S.A.B. de C.V. and subsidiaries as of December 31, 2011 and 2010 and the related consolidated statements of operations,
changes in stockholders&rsquo; equity and statement of cash flows for the year then ended and our report dated April 25, 2012 expressed
an unqualified opinion thereon.<FONT STYLE="color: black"> We did not audit the combined financial statements of Corporaci&oacute;n
Aceros D.M., S.A. de C.V. and subsidiaries and affiliates, </FONT>which total combined assets represent approximately 10% of the
total consolidated assets as of December 31, 2011 and its net combined sales for the year then ended represented approximately
a 11% of the total net consolidated sales. <FONT STYLE="color: black">Those statements were audited by other auditors whose report
has been furnished to us, and our opinion, insofar as it relates to the amounts included for Corporaci&oacute;n Aceros D.M., S.A.
de C.V. and subsidiaries and affiliates, is based solely on the report of the other auditors. </FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Castillo Miranda y Compa&ntilde;&iacute;a, S.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Member of BDO International</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">C.P.C. Carlos Rivas Ramos</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Guadalajara, Jalisco, Mexico</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">April 25, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">D.</FONT></TD><TD>Changes in Internal Control Over Financial Reporting</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 29, 2010, our external auditor
notified our Audit Committee and certain members of the management of Republic that it had identified, during its audit of the
financial statements of SimRep and its subsidiaries for the year ended December 31, 2009, what it considered to be material weaknesses
in internal control over financial reporting at the SimRep evaluation level. Specifically, our external auditor noted material
weaknesses with regard to what it characterized as &ldquo;management override of internal controls&rdquo; and identified five specific
&ldquo;management overrides.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 29, 2010 our external auditor
also noted material weaknesses in internal control over financial reporting with regard to SimRep&rsquo;s adherence to its written
policies with regard to accounting for working capital and fixed asset accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In response to the notifications from
our external auditor described above, our Audit Committee instructed our internal audit department to perform supplementary testing
actions and afterwards engaged outside counsel to conduct an internal investigation concerning these matters. Following the completion
of this internal investigation, our outside counsel discussed with our outside auditor the types of remedial measures that would
be appropriate to address these material weaknesses in internal controls over financial reporting. After consulting with our outside
auditor, our outside counsel reported the findings and conclusions of its internal investigation to our Audit Committee and recommended
that the Audit Committee adopt certain remedial measures to address these matters. On September 3, 2010, our Audit Committee adopted
the following remedial measures to address material weaknesses in internal controls over financial reporting:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="color: #010000">(1)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Our chief financial officer reviewed Republic&rsquo;s financial reporting policies and ensured that such policies
were consistent with our practices and that such policies complied with U.S. GAAP. In the future, our chief financial officer shall
approve any changes to these financial policies. The CFO of Republic and his senior subordinates who handle general accounting
and financial reporting matters will report directly to our CFO on all such matters. Republic&rsquo;s CEO shall not give instructions
or make suggestions to Republic&rsquo;s CFO or Republic&rsquo;s accounting staff concerning any general accounting or financial
reporting matters. Also, Republic&rsquo;s CFO shall report to and collaborate with Republic&rsquo;s CEO on other matters, including
cash management and cash forecasting, accounts payable and accounts receivable, payroll, financial forecasting, capital budgeting,
tax compliance, supplier and customer relationships, litigation matters, insurance and risk management, fiduciary oversight of
401K and deferred compensation plans, product costing, analysis of cost performance, and various analytical tasks.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; font-variant: normal; text-indent: 0.5in"><FONT STYLE="color: #010000">(2)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Republic&rsquo;s chief executive officer and the general manager of our controlling shareholder, Industrias CH, S.A.B.
de C.V. (&ldquo;Industrias CH&rdquo;) will certify annually that they understand that Republic&rsquo;s accounting staff is obligated
to adhere to U.S. GAAP and that they are not permitted to instruct Republic&rsquo;s accounting personnel about the accounting treatment
of any matter. In the event that any member of Republic&rsquo;s accounting staff is instructed by anyone to engage in any conduct
that the staff member believes does not comply with U.S. GAAP, that staff member is required to notify Republic&rsquo;s CFO of
such an event; Republic&rsquo;s CFO in turn is required to notify our CFO. In the event that Republic&rsquo;s CFO makes such a
notification to our CFO, Republic&rsquo;s CFO will send the relevant documentation and information to our CFO, who will analyze
it (with the assistance of a third party consultant as necessary) and make a final written determination as to the matter, provided
that if the matter involves an amount of U.S.$500,000 or more, that determination by our CFO must also be approved by our CEO and
our Audit and Corporate Practices Committee.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="color: #010000">(3)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Our senior manager in Sarbanes Oxley compliance reviewed Republic&rsquo;s testing of internal control, including
testing related to information technology.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="color: #010000">(4)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Republic has hired a professional to oversee testing of internal controls for purposes of the Sarbanes-Oxley Act
of 2002, including those related to information technology. Also, a member of our audit team shall perform an on-site review of
Republic&rsquo;s internal controls at least twice a year.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="color: #010000">(5)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>We have retained a third party consultant to evaluate what additional resources are needed by Republic&rsquo;s accounting
department. In their assessment the third party shall consider specific areas of expertise and levels of experience within Republic&rsquo;s
accounting department. We may require Republic to hire additional resources as appropriate.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="color: #010000">(6)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Republic is in the process of reforming and strengthening its whistleblower procedures in order to enable members
of Republic&rsquo;s accounting staff to anonymously report problems directly to our internal audit department, and once such process
is finished, Republic will provide training to Republic&rsquo;s accounting staff on these procedures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As a result of our evaluation on the
effectiveness of our internal controls in Mexico for the year ended December 31, 2009 and the material weakness and deficiencies
identified during that period, we conducted an analysis of functions and workloads in our finance department and we implemented
the additional following changes, which have materially affected, or are reasonably likely to materially affect, our internal controls
over financial reporting:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We have revised access levels for all users of our main information systems at our Mexican operations to secure such information
systems and monitor the changes to that system. We are also currently reviewing other systems that complement our main system.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We have started implementing what we believe is an improved system for the preparation of our consolidated reports. This consolidation
process is carried out through a semi-automated consolidation of the electronic Excel sheets, instead of a completely manual consolidation
of the electronic Excel sheets as had been the practice in the past.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We have segregated functions and procedures relating to our calculation of deferred taxes by hiring an external consultant
to perform this function.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Our CFO conducted an analysis of functions and workloads in the finance departments of all of our Mexican subsidiaries in order
to improve internal controls over financial reporting in the most efficient way possible. As a result, we distributed certain time-consuming
finance processes to personnel at our Mexican subsidiaries as the workload in the subsidiaries may have been reduced due to decreased
operations in the subsidiaries.</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On January 12, 2012, our Audit Committee
received a formal complaint from the General Accounting and Treasury Services Manager of Republic, stating that he had identified,
during his review of the financial statements of SimRep and its subsidiaries for the year ended December 31, 2011, what he considered
to be material accounting errors, and potential &ldquo;management override of internal controls&rdquo; at SimRep. In response to
the notification, our Audit Committee engaged outside counsel to perform an internal investigation as SimRep.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Following the completion of its internal
investigation of SimRep, our outside counsel discussed with our independent auditor the types of remedial measures that would be
appropriate to address the material weakness in internal control over financial reporting. After consulting with our independent
auditor, our outside counsel reported the findings and conclusions of its internal investigation to our Audit Committee and recommended
that the Audit Committee adopt certain remedial measures to address these matters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 25, 2012, our Audit Committee
adopted the following remedial measures to address the material weaknesses in internal controls over financial reporting at SimRep
that are described above in Item 15(B), which measures are reasonably likely to materially affect our internal control over financial
reporting:</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Republic will improve internal controls with respect to the valuation and accounting for obsolete inventory, including the
adoption of a written policy with specific procedures for accounting and defined criteria for determining valuation, including
the establishment of clear direct instructions as to the requirements for periodic reporting to Grupo Simec. Republic will also
designate a responsible point-person with authority to execute write-downs. Simec will communicate to the Republic management team
that the CEO fully supports, and expects compliance with, the newly adopted policy and process.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>Republic management will communicate a clear commitment throughout the organization to timely and accurate financial reporting,
including providing sufficient accounting staff who are adequately trained, improving written accounting policies, and establishing
a climate among management that is supportive of timely revenue and expense recognition in accordance with U.S. GAAP requirements.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Republic will improve the accounting and financial reporting expertise of senior financial executives, including adding additional
senior accounting and financial reporting expertise to assure compliance with U.S. GAAP, and requiring Republic&rsquo;s CFO to
follow the directives of Grupo Simec&rsquo;s CFO on accounting and financial reporting matters.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">4.</TD><TD>Republic&rsquo;s CEO and CFO will provide quarterly written certifications of compliance confirming that the CEO will not provide
any direct or indirect input on any general accounting and financial reporting matters.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">5.</TD><TD>Grupo Simec&rsquo;s Internal Auditor or CFO will visit Republic on a quarterly or other periodic basis to perform inquiries
and procedures to reasonably ensure compliance with directives from Grupo Simec company, timely resolution of accounting matters,
and ensuring lack of CEO influence over accounting matters.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">6.</TD><TD>Grupo Simec will open a clear direct line of communication from Republic&rsquo;s CFO to Grupo Simec&rsquo;s CFO on all significant
accounting matters. Such communications will not be dependent on Republic CEO&rsquo;s involvement, approval or consent.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">7.</TD><TD>Grupo Simec will open a clear and direct line of communication from Republic&rsquo;s Controller to Grupo Simec&rsquo;s CFO
on any accounting matter the Controller believes is appropriate. Such communication will not be dependent on Republic&rsquo;s CEO&rsquo;s
or CFO&rsquo;s involvement, approval or consent.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">8.</TD><TD>Republic will add a full-time internal auditor to help design, implement and monitor the continuing effectiveness of internal
controls.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">9.</TD><TD>Republic will monitor compliance by performing quarterly financial reviews to ensure timelier reporting and resolution of accounting
issues or concerns. Such review will include inquiry of operational and accounting personnel as to their understanding that there
should be no direct or indirect input by the CEO on any general accounting or financial reporting matters.</TD></TR></TABLE>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">10.</TD><TD>Republic will improve its current whistleblower procedures in order to enable members of Republic&rsquo;s accounting staff
to report problems anonymously, establish a confidential procedure for reporting accounting concerns, provide training to staff
on these procedures, and communicate to all employees the importance of anonymity of the complaints.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, as a result of our evaluation
on the effectiveness of our internal controls at Grupo Simec (Mexican operations) for the year ended December 31, 2011 and the
material weakness and deficiencies identified during that period, we will implement the following changes, which are reasonably
likely to materially affect our internal controls over financial reporting:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We will (i) review and reform our entity level controls which relate to the implementation of our ethical code, (ii)
                                                                                                            review and update our policies and procedures, (iii) provide formal training to our finance personnel related to the
                                                                                                            preparation of financial statements, (iv)
                                                                                                            carry                                                                                                             out formal
                                                                                                            follow-up procedures with respect to the remediation plans, (v) review and update our accounting manual and (vi) reform our
                                                                                                            internal control related to our patent registry.</TD></TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We will conduct an analysis of functions and workloads in the finance departments of all of our Mexican subsidiaries in order
to improve internal controls over financial reporting to avoid the errors found with respect to our financial statement closing
process, the deferred income tax process and the conversion of foreign subsidiaries process. We will also reform our training program
in order to avoid similar errors in the future.</TD></TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In our subsidiary Corporaci&oacute;n Aceros
DM, S.A. de C.V. we will perform (i) periodic physical inventories of our fixed assets; (ii) review the analysis of the segregation
of duties and proper authorization of personnel access to main information systems; (iii) obtain evidence of reconciliation of
physical and accounting information of the raw material inventory; (iv) obtain evidence of review of interim financial statements;
and (v) review and update our documentation related to the responsibilities and authority of key financial roles and communicate
adequately.</P>



<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_019"></A> <FONT STYLE="color: #010000">16.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Reserved</B></P>



<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_020"></A>Item 16A. Audit Committee Financial Expert</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our board of directors has determined
that it has at least one &ldquo;audit committee financial expert&rdquo;, as defined in Item 16.A of Form 20-F, serving on the Audit
Committee. Raul Arturo P&eacute;rez Trejo is the director whom the board of directors has determined to be an audit committee financial
expert. Holders of ADSs should understand that this designation is a disclosure requirement of the SEC related to Mr. P&eacute;rez&rsquo;s
experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on Mr. P&eacute;rez
any duties, obligations or liability that are greater than those which are generally imposed on him as a member of the Audit Committee
and board of directors, and his designation as an audit committee financial expert pursuant to this SEC requirement does not affect
the duties, obligations or liability of any other member of the Audit Committee or board of directors. Mr. P&eacute;rez is &ldquo;independent&rdquo;
as such term is defined in the listing standards of the New York Stock Exchange.</P>

<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_021"></A>Item 16B. Code of Ethics</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2002, we adopted a code of ethics
that applies to all of our employees and directors, including our principal executive officer, principal financial officer and
principal accounting officer. In 2010 and 2011, we did not amend our code of ethics in any manner, nor did we grant any waiver
from any provision of the code of ethics to any person. We will provide to any person without charge, upon written or oral request,
a copy of such code of ethics. Requests should be directed to: Grupo Simec, S.A.B. de C.V., Attention: Adolfo Luna Luna, telephone
number: 011-52-33-3770-6700.</P>


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<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_022"></A>Item 16C. Principal Accountant Fees and Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our Audit Committee has engaged BDO,
as the independent auditors of our consolidated financial statements, as of and for the years ending December 31, 2011 and 2010.
The Audit Committee has also engaged BDO USA, LLP to audit the consolidated financial statements of SimRep and subsidiaries located
in the United States. The audit of Aceros DM and subsidiaries and affiliates, located in San Luis Potos&iacute;, S.L.P. Mexico,
continue to be audited by Moore Stephens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Audit Fees</I>. We paid fees to BDO
in connection with the audit of our annual consolidated financial statements for 2011, included in our annual report on Form 20-F
in the amount of Ps. 11.2 million and Ps. 2.9 million to Moore Stephens for the audit corresponding to Aceros DM and subsidiaries
and affiliates. We paid fees to BDO in connection with the audit of our annual consolidated financial statements for 2010, included
in our annual report on Form 20-F in the amount of Ps. 9.6 million and Ps. 2.7 million to Moore Stephens for the audit corresponding
to Aceros DM and subsidiaries and affiliates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Audit Related Fees</I>. We paid fees
to Galaz, Yamazaki, Ruiz Urquiza, S.C. Member of Deloitte Touche Tohmatsu Limited in the amount of Ps. 0.85 million in 2010, for
consulting services relating to the implementation of IFRS. In 2011, we did not incur in any expenses associated with audit related
fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Tax Fees</I>. We paid fees to Ernst
&amp; Young in the amount of Ps. 0.2 million, in 2009, associated with tax compliance and tax consultation. In 2011 and 2010, we
did not incur in any expenses associated with tax compliance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Other Fees</I>. We paid no fees in
2010 and 2011 other than those set forth above to BDO or Moore Stephens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Pre-Approval Policies. </I>Our Audit
Committee has adopted a formal policy on auditor independence requiring it to approve all professional services rendered by our
independent auditor prior to the commencement of the specified services. The Audit Committee will consider annually and, if appropriate,
approve the provision of audit services by our independent auditor and consider and, if appropriate, pre-approve the provision
of certain defined audit and non-audit services. The Audit Committee also will consider on a case-by-case basis and, if appropriate,
approve specific engagements that are not otherwise pre-approved. Any proposed engagement that does not fit within the definition
of a pre-approved service may be presented to the Audit Committee for consideration at its next regular meeting or, if earlier
consideration is required, to the Audit Committee for action by written consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Audit Committee approved all of the
services incurred in 2009, 2010 and 2011, described as &ldquo;Audit Fees,&rdquo; &ldquo;Audit Related Fees&rdquo;, &ldquo;Tax Fees&rdquo;,
and &ldquo;Other Fees,&rdquo; in accordance with our policy on auditor independence.</P>

<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_023"></A>Item 16D. Exemptions from the Listing Standards for Audit Committees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_024"></A>Item 16E. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None.</P>

<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_025"></A>Item 16F. Change in Registrant&rsquo;s Certifying Accountant</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Not applicable.</P>

<P STYLE="font: bold 10pt Times New Roman Bold; margin: 0 0 12pt"><A NAME="a_026"></A>Item 16G. Corporate Governance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our following corporate governance practices
differ from the New York Stock Exchange standards in the following ways:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Board of Directors Composition, Nomination
and Board Meetings</I>. Pursuant to the Mexican Securities Market Law, our board of directors must be composed of a maximum of
21 members, of which at least 25% must be independent. The board of directors is elected by the shareholders at the annual meeting,
for a one year term with the</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0; text-indent: 0">option
to be reelected, as determined by the shareholders. One alternate director may be appointed for each director, provided that independent
alternates are appointed for the independent directors. In accordance with Mexican law, our shareholders determine directors&rsquo;
independence during the annual shareholders meeting, but this independence determination may be challenged by the CNBV. Our board
of directors meets at least quarterly and resolutions are binding if adopted by a majority of the directors present at a meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Nominating and Compensation Committees.
</I>In compliance with Mexican laws, we do not have a nominating or compensation committee. Members of our board of directors are
appointed by a majority of shareholders present at our annual shareholders meeting. We do have a corporate practice committee,
made up of three independent directors, that assists the board in determining executive compensation. Shareholders, at our annual
shareholders meeting, or the board of directors, make the final determination about executive compensation. Shareholders&rsquo;
approval must be acquired for the adoption and amendment of any equity compensation plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Audit Committee and Auditors. </I>Our
Audit Committee is governed by: (i) our by-laws and (ii) Mexican law. Our Audit Committee is made up of at least three independent
directors, appointed by the board of directors. Our shareholders appoint and/or remove the chairman of the Audit Committee at the
annual shareholders meeting. In accordance with Mexican law, the Audit Committee must provide an opinion regarding any transaction
with a related party, outside of the ordinary course of business. Such transactions must also be approved by the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, we must be audited
by an independent public accountant that has received a &ldquo;quality control review,&rdquo; as defined by the general rules issued
by the CNBV. These general rules require accounting firms rendering external audit services, to fulfill higher independence standards,
as well as issuing and following quality control internal policies and manuals in accordance with the rules issued by the Mexican
Institute of Public Accountants (<I>Instituto Mexicano de Contadores P&uacute;blicos, A.C.</I>).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Quorum Requirements and Shareholders&rsquo;
Approval</I>. In compliance with Mexican law, shareholders representing 50% of our capital stock must be present to conduct business
at the first call for ordinary shareholders meetings, dealing with general matters. If a quorum is not reached, there is no minimum
quorum requirement for a second or subsequent call. Resolutions approved at ordinary shareholders&rsquo; meetings are valid when
approved by a majority of the shares present. On the other hand, shareholders representing 75% of our capital stock must be present
to conduct business at the first call for extraordinary shareholders meeting dealing with modifications to the our by-laws. If
a quorum is not reached, shareholders representing 50% of our capital stock must be present at the meeting in a second or subsequent
call. Resolutions at extraordinary shareholders meetings are valid if approved by shares representing more than 50% of our capital
stock. However, resolutions regarding the (i) quorum requirements, (ii) minority shareholders&rsquo; rights, (iii) merger, spin-off
and conversion are valid if approved by at least 75% of our capital stock. Furthermore, resolutions regarding our registration
with the National Securities Registry (<I>Registro Nacional de Valores</I>) are valid if approved by at least 95% of our capital
stock. Class II Series &ldquo;L&rdquo; Shares, representative of our capital stock with limited economic and corporate rights,
are not taken into account when determining the quorum at the general shareholders&rsquo; meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Code of Conduct and Ethics</I>. In
compliance with Mexican law, we have a code conduct and ethics for our directors or executive officers. Also, our directors&rsquo;
and executive officers&rsquo; conduct is subject to the applicable provisions of the Mexican Securities Market Law and the regulations
issued by the CNBV</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman Bold,serif; color: #010000"><A NAME="a_027"></A>PART
III</FONT>&nbsp;</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_028"></A> <FONT STYLE="color: #010000">17.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Financial Statements</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">See &quot;Item 18&mdash;Financial Statements.&quot;</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_029"></A> <FONT STYLE="color: #010000">18.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Financial Statements</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">See our Consolidated Financial Statements
beginning at page F-1.</P>

<P STYLE="margin: 0 0 9"><FONT STYLE="color: #010000"><B>Item</B></FONT><B><A NAME="a_030"></A> <FONT STYLE="color: #010000">19.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">
</FONT></FONT>Exhibits</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the rules and regulations
of the SEC, we have filed certain agreements as exhibits to this annual report on Form 20-F. Documents filed as exhibits to this
annual report:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; vertical-align: top">Exhibit <BR>Number</TD>
    <TD STYLE="text-align: left; vertical-align: top"></TD>
    <TD STYLE="border-bottom: Black 1pt solid">Item</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 8%; text-align: left; vertical-align: top; padding-bottom: 6">1.1</TD><TD STYLE="width: 4%; padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="width: 86%; text-align: left; padding-bottom: 6">Amended and Restated by-laws (<I>estatutos sociales</I>) of the registrant, together with an English translation.*</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">4.1</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">Stock Purchase Agreement by and Among PAV Republic, Inc., The Shareholders of PAV Republic, Inc., SimRep Corporation and Industrias C.H., S.A. de C.V.*</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">4.2</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">2007-2008 Rounds Supply Agreement by and Between Republic, Inc. and United States Steel Corporation.*</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">4.3</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">Stock Purchase Agreement, dated as of February 21, 2008, among the Sellers (as defined therein) and Grupo Simec, S.A.B. de C.V. relating to the acquisition of 100% of the shares of Grupo San.**</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">8.1</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">List of subsidiaries, their jurisdiction of incorporation and names under which they do business.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">12.1</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">12.2</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top; padding-bottom: 6">13.1</TD><TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 6">Certifications of chief executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</TD></TR>
</TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">*</TD><TD>Previously filed with the SEC as an exhibit and incorporated by reference from our Registration Statement on Form F-1, File
No. 333-138239.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">**</TD><TD>Previously filed with the SEC as an exhibit and incorporated by reference from our Annual Report on Form 20-F, filed on July
1, 2008.</TD></TR></TABLE>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The registrant hereby certifies that
it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this
annual report on its behalf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in"><B>GRUPO SIMEC, S.A.B. DE C.V.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in">By: <U>/s/ Luis Garc&iacute;a Lim&oacute;n&#9;</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt">Luis Garc&iacute;a Lim&oacute;n</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt"><I>Chief Executive Officer</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in">By: <U>/s/ Adolfo Luna Luna&#9;</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt">Adolfo Luna Luna</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt"><I>Chief Financial Officer</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: May 15, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: center"><B>INDEX TO FINANCIAL STATEMENTS</B></P>



<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 95%; text-autospace: none"><B>Grupo Simec, S.A.B. de C.V.</B></TD>
    <TD STYLE="width: 5%; text-autospace: none; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_001">Report of Castillo Miranda y Compania, S. C.</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-2</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_002">Report of Mancera, S.C. Ernst &amp; Young</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-3</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_003">Report of Marcelo de Los Santos y Cia., S.C</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-4</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_004">Consolidated Balance Sheets as of December 31. 2011 and 2010</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-5</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_005">Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-6</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_006">Consolidated Statements of Changes in Stockholders&rsquo; Equity for the years ended December 31, 2011, 2010 and 2009</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-7</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_007">Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-8</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_008">Notes to Consolidated Financial Statements</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">F-9</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none"><B>Schedules to Financial Statements</B></TD>
    <TD STYLE="text-align: right; text-autospace: none; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_009">Schedule I-&nbsp;&nbsp;&nbsp;&nbsp; Condensed Parent Company Balance Sheets as of December 31, 2011 and 2010</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">S-1</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_010">Schedule I-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Parent Company Statements of Income for the years ended December 31, 2011, 2010 and 2009</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">S-2</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_011">Schedule I-&nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">S-3</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; text-autospace: none; color: #751E6C"><A HREF="#finsa_012">Schedule I-&nbsp;&nbsp;&nbsp;&nbsp; Note to Parent Company Financial Statements for the years ended December 31, 2011, 2010 and 2009</A></TD>
    <TD STYLE="text-align: right; text-autospace: none; color: #751E6C; vertical-align: bottom">S-4</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #751E6C"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 2.4in 0 174.65pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 2.4in 0 174.65pt; text-align: center"><B>&nbsp;</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="finsa_001"></A>Report of Independent Registered Public Accounting
Firm</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 161.3pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.05pt 0 0"><B>The Board of Directors and Stockholders of Grupo Simec,
S.A.B. de C.V. and Subsidiaries</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0">We have audited the accompanying consolidated balance sheets
of Grupo Simec, S.A.B. de C.V. and subsidiaries (the &ldquo;Company&rdquo;) (subsidiary of Industrias CH, S.A.B. de C.V.) as of December
31, 2011 and 2010, and the related consolidated statements of income, changes in stockholders&rsquo; equity and cash flows for the years
then ended. In connection with our audit of the financial statements, we have also audited the financial statement schedules listed
in the accompanying index. These consolidated financial statements and schedules are the responsibility of the Company&rsquo;s management.
Our responsibility is to express an opinion on these consolidated financial statements and schedules based on our audit. We did
not audit the combined financial statements of Corporacion Aceros D.M., S.A. de C.V. and subsidiaries and affiliates as of December
31, 2011 and 2010, acquired by the Company on May 31, 2008, which total combined assets represent approximately 10% and 15% of
the total consolidated assets at those dates, respectively and its net combined sales for the years then ended represented approximately
a 11% and 18% of the total net consolidated sales, respectively. Those statements were audited by other auditors whose reports
has been furnished to us, and our opinion, insofar as it relates to the amounts included for Corporacion Aceros D.M., S.A. de C.V.
and subsidiaries and affiliates, is based solely on the reports of the other auditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0">We conducted our audit in accordance with standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0">In our opinion, based on our audit and the reports of the
other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Grupo Simec, S.A.B. de C.V. and subsidiaries as of December 31, 2011 and 2010, and the consolidated results of their
operations, the changes in stockholders&rsquo; equity and cash flows for the years then ended, in conformity with Mexican financial reporting
standards, which differ in certain respects from accounting principles generally accepted in the United States of America (see
Note 25 to the consolidated financial statements).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 0 0">Also, in our opinion, the financial statement schedules,
when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects,
the information set forth therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 0 0">We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United States), Grupo Simec, S.A.B. de C.V.&rsquo;s internal control over financial
reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). We did not examine the effectiveness of internal control over financial
reporting of the subsidiaries included in the combined financial statements of Corporacion Aceros D.M., S.A. de C.V. and its subsidiaries
and affiliates. The effectiveness of Corporacion Aceros D.M., S.A. de C.V. and subsidiaries and affiliates internal control over
financial reporting was audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates
to the effectiveness of Corporacion Aceros D.M., S.A. de C.V. and subsidiaries and affiliates internal control over financial reporting,
is based solely on the report of the other auditors. Our report dated April 25, 2012 expressed an adverse opinion on the effectiveness
of the Company&rsquo;s internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 359.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.65pt 0 0 359.3pt">Castillo Miranda y Compania, S.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 80.65pt 0 5.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.65pt 0 0 359.3pt">/s/ Carlos Rivas Ramos
C.P.C. <BR>
Carlos Rivas Ramos</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0">Guadalajara, Jalisco, Mexico</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 443.5pt 0 0">April 25, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="finsa_002"></A>Report of Independent Registered Public Accounting
Firm</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>The Board of Directors and Stockholders of Grupo Simec, S.A.B.
de C.V. and Subsidiaries</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 0 0">We have audited the accompanying consolidated
statements of income, changes in stockholders&rsquo; equity and cash flow of Grupo Simec S.A.B. de C.V. and Subsidiaries (the
&ldquo;Company&rdquo;) for the year ended December 31, 2009. These consolidated financial statements are
the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We did not audit the combined financial statements of Corporacion Aceros D.M., S.A.
de C.V. and affiliates,  which statements reflect total combined revenues of Ps. 3,724,960 (thousand), for the year ended December 31, 2009. Those
statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to
the amounts included for Corporacion Aceros D.M., S.A. de C.V. and affiliates, is based solely on the report of the other
auditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 0 0">We conducted our audit in accordance with standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0">In our opinion, based on our audit and the report
of the other auditors, the financial statements referred to above present fairly, in all material respects, the
consolidated results of  operations and cash flows of Grupo Simec S.A.B. de C.V. and Subsidiaries for the year
ended December 31, 2009 in conformity with Mexican financial reporting standards, which differ in certain respects from
accounting principles generally accepted in the United States of America (see Note 25 to the consolidated financial
statements).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 0 0">As disclosed in Note 11, during 2009, the Company adopted
MFRS C-8, Intangible Assets. The application of this standard was prospective in nature.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 221.75pt 0 242.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0; text-align: center">Mancera, S.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0; text-align: center">A Member Practice of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0; text-align: center">Ernst &amp; Young Global</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.15in 0 0; text-align: center">/s/ Alejandro Cecena</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.15in 0 0; text-align: center">C.P.C. Alejandro Cecena</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 443.5pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0pt 0 0">Guadalajara, Jalisco, Mexico <BR>
September 17, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><A NAME="finsa_003"></A>Corporacion Aceros D.M., S.A. de C.V. and Affiliates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>1: Audit Report on the Combined Financial Statements for the
years ended as of December 31, 2011, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.45pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We have audited the accompanying Combined Balance Sheets of <B>Corporaci&oacute;n
Aceros D.M., S.A. de C.V. and subsidiaries and affiliates </B>as of December 31, 2011, 2010 and 2009, as well as the related Combined
Income Statements, Statements of Changes in Stockholders' Equity and Cash Flows Statements, for the years then ended. These financial
statements are<B> </B>responsibility of the Company's management. Our responsibility is to express an opinion on<B> </B>these financial
statements based on our audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement. Our audits included examining on a test basis
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide
a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">In our opinion, the accompanying combined financial statements present
fairly, in all material respects, the financial position of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries and affiliates,
as of December 3 1, 201 1, 2010 and 2009, and the results of their operations, the changes in stockholders' equity , and the cash
flows for the years then ended, in conformity with Mexican Financial Reporting Standards, which differ in certain respects from
U.S. generally accepted accounting principles (See Note 20 to the consolidated financial statements).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States of America), Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries and
affiliates internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 23, 2012, expressed
an adverse opinion on the effectiveness of internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.45pt 0 0">San Luis Potosi, S.L.P., April 23, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 423.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 423.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 423.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0 0">/s/ Marcelo de los Santos Anaya <BR>
Marcelo de los
Santos Anaya, C.P.A. <BR>
Professional Identity Card 1649173 <BR>
A.G.A.F.F. Register 10374</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>GRUPO SIMEC, S.A.B. DE C.V.
AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><A NAME="finsa_004"></A>Consolidated Balance Sheets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">(In thousands of Mexican pesos)</P>

<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0 7.1pt; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 9pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center">2011</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center"><B>2010</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; font-weight: bold; text-align: left; padding-bottom: 1pt">Assets <BR>Current assets: <BR>Cash and cash equivalents (Note 4-c)</TD>
    <TD STYLE="width: 10%; border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0.25pt; margin-right: 0; margin-bottom: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><B>Ps.</B></P></TD>
    <TD STYLE="width: 10%; border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">6,537,088</TD><TD STYLE="width: 1%; border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0.25pt; margin-right: 0; margin-bottom: 0"><B>&nbsp;</B></P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><B>&nbsp;</B></P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><B>&nbsp;</B></P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><B>Ps.</B></P></TD>
    <TD STYLE="width: 10%; border-bottom: #A6A6A6 1pt solid; text-align: right"><B>3,384,917</B></TD><TD STYLE="width: 1%; border-bottom: #A6A6A6 1pt solid; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -9.8pt; padding-left: 11.8pt">Accounts receivable: <BR>
Trade</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">3,296,377</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: right"><B>2,702,587</B></TD><TD STYLE="text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.8pt">Related parties (Note 6)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">169,018</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>126,145</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.75pt">Recoverable taxes (Note 7)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">500,688</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>677,982</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 11.75pt">Other receivables</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">8,283</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>53,358</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-left: 11.75pt">&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">3,974,366</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>3,560,072</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 11.75pt">Less: allowance for doubtful accounts</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">264,698</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>237,379</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 11.8pt">Total accounts receivable, net</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">3,709,668</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>3,322,693</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>Inventories, net (Note 8)</B></P></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">5,760,120</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><B>5,218,304</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Prepaid expenses (Nota 9)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">193,985</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>262,708</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Total current assets</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">16,200,861</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>12,188,622</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Non-current inventories (Note 4-f)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">1,792,040</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>1,605,968</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Property, plant and equipment, net (Note 10)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">9,475,562</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>9,453,237</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Intangible and other non-current assets, net (Note 11)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">3,801,003</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>4,101,141</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Total assets</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom">Ps.</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">31,269,466</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><B>Ps.</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>27,348,968</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>Liabilities and stockholders&rsquo; equity</B></P> <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>Current liabilities:</B></P></TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: right"><B>&nbsp;</B></TD><TD STYLE="text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.8pt">Short-term debt (Note 12)</TD>
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom">Ps.</TD>
    <TD STYLE="font-weight: bold; text-align: right">4,225</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>3,732</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.8pt">Accounts payable to suppliers</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">2,294,701</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>2,162,801</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.8pt">Related parties (Note 6)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">706,385</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>629,676</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.75pt">Derivative financial instruments (Note 13)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">35,456</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>79,708</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.75pt">Taxes payable</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">246,247</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>434,220</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Other Liabilities and accrued expenses</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">535,743</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>588,469</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2pt; padding-left: 2pt">Total current liabilities</TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right">3,822,757</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right"><B>3,898,606</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0pt 0 11.8pt; text-indent: -9.8pt"><B>Long-term
                                                                                                                                                                                          liabilities: <BR>
Employee benefits (Note 14)</B></P></TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">57,814</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: right"><B>45,333</B></TD><TD STYLE="text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 11.8pt">Deferred income taxes (Note 18)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">3,071,885</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>2,735,601</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 11.8pt">Other long-term liabilities (Note 20-b)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">48,187</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>51,003</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>Total long-term liabilities</B></P></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">3,177,886</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><B>2,831,937</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Total liabilities</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">7,000,643</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>6,730,543</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>&nbsp;</B></P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>Contingencies and commitments (Note 20)</B></P></TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: right"><B>&nbsp;</B></TD><TD STYLE="text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P><P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0pt 2pt"><B>Stockholders&rsquo; equity (Note 16): <BR>
Capital stock</B></P></TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">4,142,696</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>4,142,696</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Additional paid-in capital</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">4,208,204</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>4,208,204</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Retained earnings</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">12,942,705</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>10,080,278</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Translation effect in foreign subsidiaries, net (Note 4-b)</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">824,805</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>406,513</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Fair value of derivative financial instruments Note 13)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">(25,445</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">)</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>(63,349</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 2pt">Total controlling interest</TD>
    <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">22,092,965</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right"><B>18,774,342</B></TD><TD STYLE="font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Non-controlling interest (Note 17)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">2,175,858</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>1,844,083</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Total stockholders&rsquo; equity</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right">24,268,823</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><B>20,618,425</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2pt; padding-left: 2pt">Total liabilities and stockholders&rsquo; equity</TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom">Ps.</TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right">31,269,466</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; border-bottom: #A6A6A6 2pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><B>Ps.</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right"><B>27,348,968</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left"><B>&nbsp;</B></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0 7.1pt; text-align: center"></P>

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt"><B>See accompanying notes to consolidated financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt">&nbsp;</P>



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<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 9.8pt 0 7.1pt; text-align: center"><B>GRUPO SIMEC, S.A.B. DE
C.V. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 9.8pt 0 7.1pt; text-align: center"><A NAME="finsa_005"></A>Consolidated Statements of
Income</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0pt 0 0pt; text-align: center">Years ended December 31, 2011,
2010 and 2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0pt 0 0in; text-align: center">(In thousands of Mexican pesos,
except share and earnings per share figures)</P>

<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 352.35pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid"><B>2011</B></TD>
    <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid"><B>2010</B></TD>
    <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid"><B>2009</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; padding-bottom: 6">Net sales</TD>
    <TD STYLE="width: 6%; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="width: 6%; font-weight: bold; text-align: right; padding-bottom: 6"><B>29,270,498</B></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="width: 6%; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="width: 6%; font-weight: bold; text-align: right; padding-bottom: 6"><B>24,576,436</B></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="width: 6%; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps</B></TD>
    <TD STYLE="width: 6%; font-weight: bold; text-align: right; padding-bottom: 6"><B>19,231,529</B></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Cost of sales (Note 4-f)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>25,624,612</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>22,249,503</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>18,979,483</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;Gross profit <BR></TD>
    <TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>3,645,886</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>2,326,933</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>252,046</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Selling, general and administrative expenses (Note 4-f)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>1,054,152</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>1,151,968</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>1,104,085</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;Operating income (loss)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>2,591,734</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>1,174,965</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(852,039</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Other (expenses) income, net (Note 3-m)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(113,706</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(186,078</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>29,991</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Impairment of intangible assets (Note 11)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(2,368,000</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Comprehensive financing cost:<BR> &nbsp;&nbsp;&nbsp;Interest income (expense) gain, net</TD>
    <TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>2,410</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="text-align: right; padding-bottom: 6"><B>(257</B></TD><TD STYLE="text-align: left; padding-bottom: 6"><B>)</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: right; padding-bottom: 6"><B>(17,869</B></TD><TD STYLE="text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;Foreign exchange gain (loss), net (Note 4-b)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>581,630</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(207,240</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(78,429</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive financial result, net</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>584,040</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(207,497</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(96,298</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before income taxes</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right; padding-bottom: 6"><B>3,062,068</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>781,390</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(3,286,346</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 0">Income taxes (Note 18): <BR></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 0">&nbsp;&nbsp;&nbsp;Current</TD>
    <TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>(86,837</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>)</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>159,107</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>(641,742</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 6">&nbsp;&nbsp;&nbsp;Deferred</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>196,674</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(46,671</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(1,423,410</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Total income taxes</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>109,837</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>112,436</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(2,065,152</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Net income (loss)</TD>
    <TD STYLE="padding-bottom: 6; font-weight: bold; text-align: left; vertical-align: bottom; border-bottom: #A6A6A6 2pt solid"><B>Ps.</B></TD>
    <TD STYLE="padding-bottom: 6; font-weight: bold; text-align: left; border-bottom: #A6A6A6 2pt solid"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>2,952,231</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>668,954</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(1,221,194</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">Net income (loss) attributed to:</TD>
    <TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="text-align: right; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: right; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 0">&nbsp;&nbsp;&nbsp;Non-controlling interest (Note 17)</TD>
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>89,804</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>(267,547</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>)</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>(877,449</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;Controlling interest</TD>
    <TD STYLE="padding-bottom: 6; font-weight: bold; text-align: left; vertical-align: bottom; border-bottom: #A6A6A6 2pt solid"><B>&nbsp;</B></TD>
    <TD STYLE="padding-bottom: 6; font-weight: bold; text-align: left; vertical-align: bottom; border-bottom: #A6A6A6 2pt solid"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>2,862,427</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>936,501</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(343,745</B></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 6">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>2,952,231</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>668,954</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>Ps.</B></TD>
    <TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>(1,221,194</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 0">Controlling earnings per share (in thousands):</TD>
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right; padding-bottom: 0"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 0"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 6">&nbsp;&nbsp;&nbsp;Weighted average shares outstanding (Note 16)</TD>
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>497,709</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>497,709</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: right; padding-bottom: 6"><B>497,709</B></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 6">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) per share (controlling interest)<BR>
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pesos) (Note 4-v)</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right; padding-bottom: 6"><B>5.75</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>1.88</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6">&nbsp;</TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; padding-bottom: 6"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right; padding-bottom: 6"><B>(0.69</B></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left; padding-bottom: 6"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 352.35pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt">See accompanying notes to consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 8.8pt 0 7.1pt; text-indent: -0.1pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 170.95pt 0 171.9pt; text-align: center; text-indent: -0.1pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0; text-align: center; text-indent: -0.1pt"><B>GRUPO
SIMEC, S.A.B. DE C.V. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0 0pt; text-align: center; text-indent: -0.1pt"><A NAME="finsa_006"></A><B></B>Consolidated Statements of Changes in Stockholders&rsquo; Equity</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0; text-align: center; text-indent: -0.1pt">Years ended December
31, 2011, 2010 and 2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0; text-align: center; text-indent: -0.1pt">(In thousands of Mexican
pesos)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>Capital</B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>stock</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>Additional</B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>paid-in
        capital</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>Retained
        </B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>earnings</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>Translation</B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>effect
        in </B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>foreign</B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>subsidiaries</B></FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2008 originally
    reported</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,142,696</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,208,204</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">9,507,958</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">595,165</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Accounting changes in inventories valuation
    (See Note 4-f)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">88,879</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2008</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,142,696</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,208,204</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">9,596,837</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">595,165</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Comprehensive income:</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net loss for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(343,745)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(79,507)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of market value of swaps net of
    deferred taxes</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of the adoption of the new MFRS
    C-8 (Note 11)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(109,315)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2009</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,142,696</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,208,204</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">9,143,777</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">515,658</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Comprehensive income:</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net income for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">936,501</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(109,145)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of market value of swaps net of
    deferred taxes</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 8.8pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2010</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,142,696</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,208,204</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">10,080,278</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">406,513</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Comprehensive income:</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net income for the year</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">2,862,427</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">418,292</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of market value of swaps net of
    deferred taxes</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2011</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,142,696</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">4,208,204</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">12,942,705</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">824,805</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -6.5pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt"><B>Fair
    value of derivative financial instruments</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>Total
        </B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>controlling
        </B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>interest</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -6.5pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt"><B>Non-controlling
    interest</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>Total
        </B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>stockholders&rsquo;
        </B></FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>equity</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -6.5pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt"><B>Comprehensive
    income</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2008 originally
    reported</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(270,868)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">18,183,155</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">3,122,342</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">21,305,497</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Accounting changes in inventories valuation
    (See Note 4-f)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">88,879</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">53,861</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">142,740</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2008</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(270,868)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">18,272,034</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">3,176,203</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">21,448,237</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Comprehensive income:</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net loss for the year</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(343,745)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(877,449)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(1,221,194)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(1,221,194)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(79,507)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(78,810)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(158,317)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(158,317)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of market value of swaps net of
    deferred taxes</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">119,141</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">119,141</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">119,141</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">119,141</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of the adoption of the new MFRS
    C-8 (Note 11)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(109,315)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(109,315)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2009</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(151,727)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">17,858,608</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">2,219,944</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">20,078,552</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(1,260,370)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Comprehensive income:</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net income (loss) for the year</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">936,501</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(267,547)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">668,954</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">668,954</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 7.65pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(109,145)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(107,800)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(216,945)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 9pt">(216,945)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of market value of swaps net of
    deferred taxes</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">88,378</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">88,378</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(514)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">87,864</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">87,864</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2010</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(63,349)</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">18,774,342</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">1,844,083</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">20,618,425</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">539,873</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Comprehensive income:</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net income (loss) for the year</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">2,862,427</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">89,804</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">2,952,231</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">2,952,231</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">418,292</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">245,858</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">664,150</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">664,150</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Effect of market value of swaps net of
    deferred taxes</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">37,904</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">37,904</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(3,887)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">34,017</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">34,017</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Balances at December 31, 2011</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(25,445)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">22,092,965</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">2,175,858</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">24,268,823</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.8pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">3,650,398</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt; text-align: center">See accompanying notes to consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 8.8pt 0 7.1pt; text-align: center"><B>GRUPO SIMEC, S.A.B. DE
C.V. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 3em; text-align: center"><A NAME="finsa_007"></A>Consolidated Statement of Cash
Flows</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 3em; text-align: center">Years ended December 31, 2011,
2010 and 2009 <BR>
(In thousands of Mexican pesos)</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 367.8pt"><B>&#9;&#9;</B></P>

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 9pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 9pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; vertical-align: bottom; border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 9pt"><B>2009</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 9pt">Operating activities: <BR>Income (loss)
    before income taxes</FONT></TD>
    <TD STYLE="width: 6%; text-align: left; vertical-align: bottom"><P STYLE="font: 5pt Times New Roman, Times, Serif; margin-top: 0.15pt; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt"><B>Ps.</B></FONT></P></TD>
    <TD STYLE="width: 6%; font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">3,062,068</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 6%; text-align: left; vertical-align: bottom"><P STYLE="font: 5pt Times New Roman, Times, Serif; margin-top: 0.15pt; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt"><B>Ps.</B></FONT></P></TD>
    <TD STYLE="width: 6%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">781,390</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 6%; text-align: left; vertical-align: bottom"><P STYLE="font: 5pt Times New Roman, Times, Serif; margin-top: 0.15pt; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt"><B>Ps.</B></FONT></P></TD>
    <TD STYLE="width: 6%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(3,286,346</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">Charges (credits) to results not requiring cash:</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-top: 9">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Depreciation and amortization</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,001,098</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,098,208</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,047,882</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Impairment of intangible assets</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">2,368,000</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Provision for employee benefits</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">12,481</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">12,193</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">35,708</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Unrealized foreign exchange (gain) loss <BR>&nbsp;&nbsp;&nbsp;Cancellation
    of other assets (Note 3-m)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(664,023</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt"><B>117,453 117,457</B></FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 9pt"><B>-</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 9pt"><B>-</B></FONT></P></TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;&nbsp;&nbsp;Allowance
                                 for doubtful accounts</FONT></P> <P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></P></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">7,578</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(115,036</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">129,865</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;&nbsp;&nbsp;Allowance for inventories <BR></FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">118,705</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;&nbsp;&nbsp;Accrued interest</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(2,410</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,858</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">17,680</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">3,535,497</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">2,013,523</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">312,789</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-top: 9">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Changes in:</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;&nbsp;&nbsp;Trade receivable, net</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(431,775</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(336,840</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">630,548</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Related parties receivables</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(42,873</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(62,897</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">48,764</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Inventories, net <BR></FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 9pt"><B>15,095</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"></P></TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 9pt"><B>(176,173</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"></P></TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">)<FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 9pt"><B>2,103,460</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0.65pt; margin-bottom: 0; text-align: right"></P></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Recoverable taxes, other accounts receivable <BR>
&nbsp;&nbsp;&nbsp;and
    prepaid expenses</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;407,890</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">330,641</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>&nbsp;79,464</B></FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Accounts payable to suppliers</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(45,518</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">331,836</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(1,338,235</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Related parties payable</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(182,811</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">102,993</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(98,413</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Taxes and other accounts payable</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(294,309</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(182,379</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(361,591</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Income tax recoverable (paid)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(6,922</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">323,374</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(217,285</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Resources provided by operating activities</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">2,954,274</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">2,344,078</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,159,501</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-top: 9"><FONT STYLE="font-size: 9pt">Investing activities:</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Investment in shares (Note 3-m)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(187,433</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Acquisition of property, plant and equipment</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(432,000</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(496,361</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(263,207</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Increase in other noncurrent assets</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(34,200</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(8,794</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">818</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Proceeds from sale of machinery and equipment</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">6,114</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Resources used in investing activities</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(466,200</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(692,588</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(256,275</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-top: 9"><FONT STYLE="font-size: 9pt">Financing activities:</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Financial debt payment</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(8,656</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(8,800</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Loans received from related parties</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">74,963</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">323,720</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,189,850</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Payments to related parties</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(51,225</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(442,688</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(709,219</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Interest collected (paid)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">2,410</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,204</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(2,494</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-top: 9">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Resources provided by (used in ) financing
    activities</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">26,148</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(126,420</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">469,337</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><P STYLE="text-align: left; padding-top: 9"><FONT STYLE="font-size: 9pt">&nbsp;&nbsp;&nbsp;Net
                                                                                                                                                                                           increase
                                                                                                                                                                                           in
                                                                                                                                                                                           cash
                                                                                                                                                                                           and
                                                                                                                                                                                           cash
                                                                                                                                                                                           equivalents</FONT></P></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt"><B>2,514,222</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt"><B>1,525,070</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt"><B>1,372,563</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Effect of exchange rate fluctuation on cash and cash equivalents</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">637,949</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(89,053</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">(404</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Cash and cash equivalents at beginning of year</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">3,384,917</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,948,900</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">576,741</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 2pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 9pt">Cash and cash equivalents at end of year</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Ps.</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">6,537,088</FONT></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Ps.</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">3,384,917</FONT></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Ps</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-size: 9pt">1,948,900</FONT></TD><TD STYLE="border-bottom: #A6A6A6 2pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.5pt 0 0 21.75pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7pt">See accompanying notes to consolidated financial statements.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>



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<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 173.8pt 0 173.65pt; text-align: center"><B>GRUPO SIMEC, S.A.B.
DE C.V. AND SUBSIDIARIES </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="finsa_008"></A>Notes to the Consolidated Financial Statements <BR>
December 31, 2011, 2010 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 3em; text-align: center">(In thousands of Mexican pesos,
except where other currency is indicated)</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.75pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>1.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Compliance with Mexican Financial Reporting Standards</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 11.75pt 0 28.35pt">The accompanying consolidated financial statements
have been prepared in accordance with Mexican Financial Reporting Standards (hereinafter referred as &ldquo;MFRS&rdquo; or &ldquo;Mexican
Accounting Bulletin&rdquo;), issued by the Mexican Financial Reporting Standards Board <B>(<I>Consejo Mexicano de Normas de Informaci&oacute;n
Financiera, A.C</I></B><I>.( Spanish initials </I>CINIF).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.75pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>2.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Activity of the Company</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 11.75pt 0 28.35pt">The principal activities of Grupo Simec, S.A.B.
de C.V. and its subsidiaries (the Company) are the manufacturing,, processing and distribution of special bar quality (&ldquo;SBQ&rdquo;),
and structural steel in Mexico, United States of America (USA) and Canada. The Company is a subsidiary of Industrias CH, S.A.B.
de C.V. (ICH).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.75pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>3.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Basis of consolidation and significant transactions</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 11.75pt 0 28.35pt">The consolidated financial statements include
the assets, liabilities, and results of Grupo Simec, S.A.B. de C. V. and its subsidiaries, each of which the Company owns more
than 50% of the capital stock. All significant intercompany balances and transactions have been eliminated in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>



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<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt">At December 31, 2011 and 2010 the subsidiaries of Grupo,
Simec, S. A. B. de C. V. included in the consolidation are as follows.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 32.85pt 0 0; text-align: right">&nbsp;</P>

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 67%; padding-right: -1pt; padding-left: 2pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Subsidiaries
    established in Mexico:</B></FONT></TD>
    <TD STYLE="width: 12%; border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt"><B>Percentage
    of equity owned</B></FONT></TD>
    <TD STYLE="width: 21%; border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt"><B>Main
    activity</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Compa&ntilde;&iacute;a Sider&uacute;rgica
    de Guadalajara, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Leasing</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Arrendadora Norte de
    Matamoros S.A. de C.V. (1)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Leasing</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Arrendadora Simec, S.A.
    de C.V.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Leasing</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Compa&ntilde;&iacute;a Sider&uacute;rgica
    del Pac&iacute;fico, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Leasing </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Coordinadora de Servicios Sider&uacute;rgicos
    de Calidad, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Industrias del Acero y del Alambre, S.A. de
    C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Procesadora Mexicali, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Purchase and sale
    of scrap</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Servicios Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider
    </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Sistemas de Transporte de Baja California,
    S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Freight</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Operadora de Servicios Sider&uacute;rgicos
    de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider
    </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Operadora de Metales, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Administradora de Servicios Sider&uacute;rgicos
    de Tlaxcala, S.A., de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Comercializadora Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">CSG Comercial, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.95%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Corporativos G&amp;DL, S.A. de C.V.(2)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider
    </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Comercializadora de Productos de Acero de
    Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.95%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Sider&uacute;rgica de Baja California, S.A.
    de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.95%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Operadora de Servicios de la Industria Sider&uacute;rgica
    ICH, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Service provider
    </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Productos Sider&uacute;rgicos de Tlaxcala,
    S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Comercializadora MSAN, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International 2, Inc (3)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International 3, Inc. (3)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Corporaci&oacute;n Aceros DM, S. A. de C.
    V. and Subsidiaries (4)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International 4, Inc. (3) y (4)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International 5, Inc. (3) y (4)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Acero Transportes San, S. A. de C. V. (4)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Freight</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec Acero, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Corporacion ASL, S. A.
    de C. V. (2)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Leasing</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International 6, S. A. de C. V. (2)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec International 7, S. A. de C. V. (2)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.55pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>99.99%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Producer</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Subsidiaries established
    in foreign countries:</B></FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">SimRep Corporation and Subsidiaries (5) (6)
    y (7)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 26.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>50.22%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Production and
    sale</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Pacific Steel, Inc. (6)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Purchase and sale
    of scrap </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Pacific Steel Projects, Inc. (6)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Investment projects</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec Steel, Inc. (6)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Treasury</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Simec USA, Corp. (6)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Trading </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">Undershaft Investments, NV. (8)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Holding</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 9pt">GV do Brasil Industria e Comercio de Aco LTDA
    (9)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 24.05pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>100.00%</B></FONT></TD>
    <TD STYLE="padding-right: 3.45pt; padding-left: 4.75pt; font-weight: bold"><FONT STYLE="font-size: 9pt"><B>Production and
    sale</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt"></TD><TD STYLE="width: 24pt"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="padding-right: 9.8pt"><FONT STYLE="font-size: 10pt">Company sold on May 2011.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt"></TD><TD STYLE="width: 24pt"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="padding-right: 9.8pt"><FONT STYLE="font-size: 10pt">Entities incorporated in 2010.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt"></TD><TD STYLE="width: 24pt"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="padding-right: 9.8pt"><FONT STYLE="font-size: 10pt">Entities that changed their address and fiscal authority, to the
state of California, USA in 2011. Since the change, the main activity of these entities is the acquisition of new business or projects.
</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt"></TD><TD STYLE="width: 24.2pt">(4)</TD><TD STYLE="padding-right: 9.8pt">This Subsidiaries are located in San Luis Potosi, in Mexico, which were acquired by Grupo Simec,
S.A.B. de C.V. in 2008. For the purpose of these Notes to Consolidated Financial Statements, these companies are named as &ldquo;Grupo
San&rdquo;.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt; text-align: right"></TD><TD STYLE="width: 24.2pt">(5)</TD><TD>The parent Company ICH it&rsquo;s the owner of 49.78% of capital stock of this subsidiary.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt; text-align: right"></TD><TD STYLE="width: 24.2pt">(6)</TD><TD>Companies established in the United States of America, except for one facility that
is established in Canada.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt"></TD><TD STYLE="width: 24.2pt">(7)</TD><TD STYLE="padding-right: 9.8pt">SimRep does not have important transaction or assets, except for the investment on Republic Steel.
Before September 2011 the name of this subsidiary was Republic Engineered Products, Inc.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt; text-align: right"></TD><TD STYLE="width: 24.2pt">(8)</TD><TD>Subsidiary established in Curacao.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 8pt; text-align: right"></TD><TD STYLE="width: 24.2pt">(9)</TD><TD>Subsidiary established in Brazil. (See paragraph k, below)</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0"><B>Significant transactions</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">a)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">In February 2011, Republic, through two of its wholly
owned subsidiaries (Solon Wire Processing LLC, formerly REP Acquisition LLC, and the newly formed Republic Memphis LLC) acquired
certain land, plants, machinery and equipment from BCS Industries LLC and affiliates (&ldquo;Bluff City Steel&rdquo;) for cash
of US$&nbsp;2.5 million and the essential forgiveness of US$&nbsp;6.0 million of net receivables due from Bluff City Steel to
Republic. Prior to the acquisition, Bluff City Steel was a vendor to the Company that performed certain production processes.
The Company made the acquisition to make these processes part of its internal production process.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 7.1pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">b)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">In November 2011, Republic entered into an agreement
with an unrelated third-party (&ldquo;purchaser&rdquo;) for the factoring of specific accounts receivable in order to reduce the
amount of working capital required to fund such receivables. The agreement has an initial term of one year and is automatically
extended for additional periods of one year each unless either party provides written notice of cancellation.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 20pt; text-indent: 0pt">On
the sale date, the purchaser advances funds equivalent to 80% of the value of receivables. The maximum amount of outstanding advances
related to the assigned receivables is US$30 million. Proceeds on the transfer reflect the face value of the account less a discount.
The remaining amount between the receivable balance and the advance is held in reserve by the purchaser. Payment of the funds
held in reserve less a discount fee are made by the purchaser within four days of receipt of payment on collection of funds related
to each assigned receivable. The discount fee, which generally ranges from 1% if paid within 30 days (of the advance date) to
3.75% if paid within 90 days, is recorded as a charge to interest expense in the Consolidated Statements of Income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 20pt; text-indent: 0pt">The
purchaser shall have no recourse against Republic if payments are not received due to insolvency of an account debtor within 120
days of the invoice date. However, while the facility calls for the sale, assignment, transfer and conveyance of all rights, title
and interests in the selected accounts receivable, the purchaser may put and charge-back any receivable not paid to the purchaser
within 90 days of purchase for any reason besides insolvency of the account debtor. As collateral for the repayment of advances
for receivables sold, the purchaser has a priority security interest in all accounts receivable of Republic (as defined by the
Uniform Commercial Code).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 20pt; text-indent: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 20pt; text-indent: 0pt">For
the year ended December 31, 2011, the Company sold a face amount of US$11.0 million of accounts receivable to the purchaser. Discount
fees incurred pursuant to this agreement were approximately US$0.2 million for the year ended December 31, 2011. There was US$
0.9 million of accounts receivable factored which had not been collected by the purchaser at December 31, 2011, and therefore
was subject to charge-back to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">c)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On May 20 and October 3, 2011 in Extraordinary Shareholders
Meetings, Simec International 2, S.A. de C.V., Simec International 3, S.A. de C.V., Simec International 4, S.A. de C.V. and Simec
International 5, S.A. de C.V., changed their address and tax authority to report to the State of California, USA, transforming
them in Incorporated Companies in accordance with the laws and regulations of the State of California, USA.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">d)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On May 31, 2011 Grupo Simec S.A.B. de C.V. (Simec) sold
their share capital in Arrendadora Norte de Matamoros, S.A. de C.V. to Perfiles Comerciales Sigosa, S.A. de C.V. (a subsidiary
of ICH) in Ps. 42.5 million. This amount was paid in cash.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">e)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On May 2, 2011 in Extraordinary Shareholders Meetings
of Acero Transportes, S.A. de C.V. and Acero Transportes San, S.A. de C.V. (subsidiaries of Grupo San), it was authorized the
merger of the two subsidiaries. Acero Transportes, S.A. de C.V. was merged into Acero Transportes San, S.A. de C.V. using the
financial statements of April 30, 2011.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">f)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On September 1, 2011 in Extraordinary Shareholders Meetings
of Procesadora Industrial San, S.A. de C.V. and Malla San, S.A. de C.V. (subsidiaries of Grupo San), it was authorized the merger
of the two subsidiaries. Procesadora Industrial San, S.A. de C.V. merged into Malla San, S.A. de C.V. using the financial statements
of July 31, 2011.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">g)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On December 30, 2011 Simec International 7, S.A. de
C.V. sold to Corporaci&oacute;n ASL, S.A. de C.V. all the shares held in on Corporaci&oacute;n Aceros DM, S.A de C.V., totalling
627,305,446 shares (99.9% of the common stock) with a value of Ps. 3,200 million, with a down payment of Ps. 63 million and the
remaining of Ps. 3,137 million will be paid with a security with a due date on April 30, 2012. This transaction generate a tax
loss of Ps.7,860 million. According with actual Mexican Tax Law (Ley de Impuesto Sobre la Renta) this amount only its deductible
against future gains related to shares sales. On January 30, 2012 Simec International 7, S.A. de C.V. filed a demand against the
actual law which limit the deduction of this tax loss related to shares sales.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">h)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On May 31, 2010 in the Extraordinary Shareholders Meeting
of Arrendadora Simec, S.A. de C.V., it was authorized to split certain assets, liabilities and equity to a newly formed entity,
Corporacion ASL, S.A. de C.V. This new Company assumed the operation of Arrendadora Simec, S.A. de C.V.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 21.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 21.3pt; text-align: justify">&nbsp;</P>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">i)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On June 28, 2010, Simec International 6, S.A. de C.V.
was incorporated The activity of this new company is the production of steel and started operations in November of 2010.</FONT></TD>
</TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">j)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On June 30, 2010, in the Extraordinary Shareholders
Meeting of Simec International, S.A. de C.V., it was authorized to split certain assets and equity, to a newly incorporated entity,
Simec International 7, S.A. de C.V. The asset transferred was the investment in the shares of Corporacion Aceros DM, S.A. de C.V.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 10.95pt 0 8pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">k)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On September 3, 2010 a Brazilian entity GV do Brazil Industria e Comercio de Aco LTDA, was
                                                                                                                   incorporated. On August 5, 2011 that company acquired 1,300,000 square meters of land on Pindamonhangaba, Sao Paulo State,
                                                                                                                   Brazil, in the amount of US$8 million, where is going to be built a new steel facility that it is in the process of
                                                                                                                   construction and it will start operations approximately on August, 2013. Grupo Simec as holding of 100% of the shares of GV
                                                                                                                   do Brazil, its acquiring the machinery and will transfer it to the subsidiary as a contribution of common stock, when those
                                                                                                                   assets are shipped. The budget for the project will be US$&nbsp;236 million (Integrated for US$&nbsp;171 million and
                                                                                                                   $&nbsp;65 million as foreign investment incentives granted by the Brazil Government. The facility will have a production
                                                                                                                   capacity of 520,000 tons of billet and 400,000 tons of finish goods of rebar and wire in the beginning, this production will
                                                                                                                   be marketed to the construction sector and the company will have approximately 800 workers.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 28.45pt 0 21.3pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">l)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On October 21, 2010 in the Extraordinary Shareholders
Meeting of Arrendadora Simec S.A. de C.V. the dissolution of the company was approved.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 10.95pt 0 8pt; text-align: justify; text-indent: -22.2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">m)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">On November 2, 2010, the Company acquired 100% of the
shares of Lipa Capital, LLC. (Lipa Capital) from Sbq Partners, LLC., owner of the intellectual property of interest to the Company.
The total cost of this acquisition amounted to Ps. 187,433 (US$ 15.2 million) and the equity amounted to Ps. 69, 976. This acquisition
resulted in the recording of an intangible asset of Ps. 117,457 related to a patent of the acquired entity. This intangible asset
was subsequently written off and expensed in the consolidated income statement for the year ended December 31, 2010 because the
Company ultimately concluded that such patent would not be generating additional cash flows. This amount is part of other expenses
included in the consolidated statement of income. The Company transferred Lipa Capital&rsquo;s jurisdiction from the United States
of America to the United Mexican States on December 7, 2010 and merged it with Simec International 6, S.A. de C.V., on December
9, 2010.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0; text-align: justify">&nbsp;</P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>4.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Summary of significant accounting policies.</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0 7.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The significant accounting policies followed by the
Company are summarized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 23.3pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>a.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Recognition of the effects of inflation on the financial information</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">According with the MFRS B-10, the effects in the
inflation are recognized only when the economic environment has been qualified as inflationary (cumulative inflation equal or more
to 26% in the last three years previous).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">Since the accumulated inflation in the previous
three years of the financial statements attached hereto was lower than 26%, the economic environment has been qualified as non-inflationary,
therefore, the financial statements for years 2011, 2010 and 2009 attached hereto are presented in nominal pesos, except for the
non-monetary items acquired before 2008, which include their restatement to constant pesos as of December 31, 2007. Accumulated
inflation in the last three years prior to 2011 and 2010 rose to 15.2% and 14.5%, respectively.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 0 0 49.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">The application of Bulletin B-10 &ldquo;Recognition
of Inflation Effects in Financial Information&rdquo; was effective until December</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.1pt 45.85pt 0 49.65pt">31, 2007, therefore the amounts of capital
stock, additional paid in capital and retained earnings were restated in Mexican pesos with purchasing power at December 31, 2007,
applying factors derived from the Mexican National Consumer Price Index (NCPI). See note 4-h.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.7pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>b.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Foreign currency translation</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">Transactions in foreign currencies are recorded
at the exchange rates prevailing at the celebration and liquidation dates. The assets and liabilities in foreign currencies are
translated at the exchange rates prevailing at the date of the consolidated balance sheet. The exchange gains or losses incurred
in connection with those assets or liabilities are included in the consolidated statements of income, as part of the comprehensive
financing cost. Note 5 shows the consolidated position in foreign currencies at the end of each year and the exchange rates used
in the translation.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">The functional and reporting currency of the Company
is the Mexican peso. The financial statements of foreign subsidiaries were translated to Mexican pesos in accordance with MFRS
B-15 &ldquo;Conversion of foreign currencies&rdquo;. Under this Standard, the first step to convert financial information from
operations abroad is the determination of the functional currency. The functional currency is the currency of the primary economic
environment of the foreign operation or, if different, the currency that mainly impacts its cash flows. This rule incorporates
the concepts of recording currency that is the currency in which the entity maintains its accounting records, whether for legal
or information purposes and the reporting currency, which is the currency chosen by the Company to report its financial information.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">The U.S. dollar (US Dollar or US$) was considered
as the functional currency of the U.S. subsidiaries, SimRep Corporation and Subsidiaries and Pacific Steel Inc., and the Brazilian
real for GV do Brasil Industria e Comercio de Aco LTDA.; therefore the financial statements of these foreign subsidiaries were
translated into Mexican pesos by applying:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.75pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">The exchange rates at the balance sheet date to all
assets and liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">The historical exchange rate for stockholders&rsquo;
equity accounts, revenues, costs and expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">The historical exchange rate for revenues, costs and
expenses of the year reported.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 41.25pt 0 49.65pt">The difference resulting from the translation
processes, is recognized as accumulative translation adjustment as part of translation effect in foreign subsidiaries in stockholders&rsquo;
equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Mexican Peso was considered the functional
currency of the subsidiaries Simec USA, Corp., Pacific Steel Projects, Inc., Simec Steel, Inc. and Simec International 2, 3, 4
and 5, these last established in the United State of America in 2011, while the U.S. dollar as its recording currency; therefore
the financial statements were translated to Mexican pesos as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Monetary assets and liabilities by applying
the exchange rates at the balance sheet date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Non-monetary assets and liabilities,
as well as stockholders&rsquo; equity accounts, at the historical exchange rate,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Revenues, costs and expenses at the historical
exchange rate. The effect of non-monetary assets and liabilities in the income of the year, such depreciation and cost of sales,
are translate at historical exchange rate corresponding to the balance sheet date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Translation differences were carried directly
to the income statement as part of the comprehensive financing cost under the caption foreign exchange gain, net. As of December
31 2011 the gain amounted to Ps. 813,146 (loss in 2010 amounting Ps. 106,768).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.6pt 36.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>c.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Cash and cash equivalents</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Cash consists of deposits in bank accounts that
do not generate interest. Cash equivalents consists in temporary investments whose original maturity is less than three months.
These investments are valued at cost plus accrued yields. The value so determined is similar to their fair value. As of December
31, 2011 and 2010, those investments amounted to Ps. 5,310,217 and Ps. 2,615,518, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.7pt 36.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>d.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Derivative financial instruments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">During 2011, 2010 and 2009 the Company used derivative
financial instruments for hedging risks associated with natural gas prices, and this commodity its used for the production of goods,
for which it conducted studies on historical consumption, future requirement and commitments acquired, thus diminishing its exposure
to risks other than its normal operating risks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The risks associated with changes in natural gas
prices occurring naturally as a result of the supply and demand on international markets, are covered through the use of natural
gas cash-flow exchange contracts or natural gas swaps to offset fluctuations in the price of natural gas, whereby the Company receives
a floating price and pays a fixed price. Fluctuations in natural gas prices from volumes consumed are recognized as part of the
Company&rsquo;s cost of sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The derivative financial instruments are presented
in the Consolidated Financial Balance sheets at fair value, based on the original agreement. In a monthly basis fair value is recalculated
and the related assets or liabilities are restated based on a new estimation. . The Company periodically evaluates the changes
in cash flows of the derivative instrument to analyze if the swaps are highly effective for mitigating the exposure to natural
gas price fluctuations. As of December 31, 2011, 2010 and 2009, the fair value of derivative instruments that did not qualify as
hedging instruments were adjusted through the income statement of the year. For the derivatives that qualified for hedge accounting
cash flow their fair value was adjusted through the Stockholders&rsquo; equity in the caption of comprehensive income, net of the
effect of the deferred income tax. See note 13.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">A hedge instrument is considered to be highly
effective when changes in its fair value or cash flows of the primary position are compensated on a regular or cumulatively basis,
by changes in fair value or cash flows of the hedging instrument in a range between 80% and 125%. To the end of 2011, 2010 and
2009 the fair value of derivatives was effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 36.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>e.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Allowances for doubtful accounts</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Allowances for doubtful accounts are maintained
to provide for estimated losses resulting from the inability of customers to make required payments. If the financial condition
of these customers deteriorates, resulting in their inability to make payments, additional allowances may be required. The Company
also records allowances for accounts receivable for customers based on a variety of factors, including pricing adjustments, length
of time receivables are past due, and historical experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>f.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Inventories and cost of sales</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 36.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Inventories are recorded at the acquisition cost
and production, which do not exceed the market value. The allocation of cost used is the average cost. Cost of sales its determined
using that formula.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Before January 1, 2011 the inventories were determined
with the direct costing system. In that valuation system, indirect cost of production were not included in the production cost,
and are recorded directly in the income statement as operating expense, based on the consideration that the cost should not be
affected by the fixed expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">From January 1, 2011 the amendment to MFRS C-4
(&ldquo;inventories&rdquo;) prohibits the use of direct costing to determine the value of inventories, from this date, the indirect
cost of production have to be included as part of the production cost ( full absorption cost), therefore, for comparison purposes
and according with the MFRS B-1 &ldquo;Accounting changes and error corrections&rdquo;, the financial statement of 2010 and 2009
here included were restructured. . The cumulative effect derived from this change amounted to Ps. 160,675, Ps 96,658 and Ps. 142,740
as of December 31, 2010, 2009 and 2008, respectively, net of the deferred income tax. The effect to the controlling interest amounted
to Ps. 101,030, Ps. 68,072 and Ps.&nbsp;88,879, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">As a result of this adoption, the indirect cost
previously presented in the Consolidated Income Statement in the caption Indirect overhead, selling, general and administrative
expenses in 2010 and 2009, amounting Ps. 1,809,976 and Ps. 1,673,421 were reclassified to cost of sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Company classifies rollers and spare parts
as long-term inventories, which in accordance with historical data and production trends will not be used in the short-term (one
year).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">As of December 31, 2011 and 2010, the Company
has inventory of raw materials (coke) which, due to low production in one facility of Republic, has not been used in the past 3
years, for these reason this inventories are classified in the long term. The amount at this date, included in long-term inventories,
totaled Ps.1,651,875 and Ps. 1,450,352 respectively. The inventory balance includes a provision to lower of cost market amounting
to Ps. 765,848 and Ps. 671,287 as of December 31, 2011 and 2010, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>g.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Reserve for slow-moving inventory</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Company follows the practice of providing
a reserve for slow-moving inventory, considering the totality of products and raw materials that show impairment or degradation
for future use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>h.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Property, plant and equipment</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Property, plant and equipment are recorded at
acquisition cost. Assets acquired in 2007 and prior years include a restatement determined by applying factors derived from the
NCPI as of December 31, 2007, to the acquisition cost, except machinery and equipment of foreign origin which was updated using
the inflation rates in the country of origin and fluctuation in exchange rates in relation to Mexican peso.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Depreciation of property, plant and equipment
is computed using the straight-line method, based on the estimated remaining useful lives of the related assets determined by the
Company. The mentioned restatement is debited to results of operations as the related asset is depreciated or disposed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The estimated useful lives of the Company&rsquo;s
main assets are the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 161.4pt 0 0; text-align: right"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 81%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 19%; text-align: center; border-bottom: rgb(166,166,166) 1pt solid">Years</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 1.7pt">Buildings</TD>
    <TD STYLE="padding-top: 1.7pt; text-align: center">10 to 65</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Machinery and equipment</TD>
    <TD STYLE="text-align: center">5 to 40</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Transportation equipment</TD>
    <TD STYLE="text-align: center">4</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Furniture, mixtures and computer equipment</TD>
    <TD STYLE="text-align: center">3 to 10</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 161.4pt 0 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>i.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Comprehensive Financing Cost (CFC)</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">In the case of assets who require a substantial
period of time for its use, comprehensive financing cost is capitalized as incurred during the period of construction and installation
of property, plant and equipment during the construction process. The amount of capitalized financing costs results from the application
of the financial weighted average capitalization rate to the investment in qualified assets over the period of acquisition. In
the case of foreign currency financing, the comprehensive financing cost includes in addition the corresponding exchange gains
and losses, net of valuation effects of hedging instruments associated with such loans. The comprehensive financing cost includes
(i) the interest cost, (ii) any foreign currency fluctuations, and (iii) the related monetary position. Until December 31, 2007,
such costs were restated based on the NCPI factors from the date capitalized through year-end and amortized over the average depreciation
period of the related assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>j.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Leases</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Lease arrangements are classified as capital leases
if under the agreement, the ownership of the leased asset is transferred to the lessee upon termination of the lease, the agreement
includes an option to purchase the asset at a reduced price, the term of the lease is basically the same as the remaining useful
life of the leased asset, or the present value of minimum lease payments is basically the same as the market value of the leased
asset, net of any benefit or scrap value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">When the lesser retains the risks or benefits
inherent to the ownership of the leased asset, the agreements are classified as operating leases and rent is charged to results
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>k.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Intangible assets and goodwill </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Intangible assets and goodwill are recorded at
acquisition cost. Those acquired in 2007 and prior years include a restatement determined by applying factors derived from the
NCPI as of December 31, 2007, to the acquisition cost. Intangibles assets that have definite life are amortized based on their
estimated useful life through the straight-line method by the Company. (see note 11). The restatement referred above is charged
to expense as the asset is amortized or disposed. Intangible assets indefinite life and goodwill (generated in the acquisition
of Grupo San) are not subject to amortization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Impairment tests are made on an annual basis on
intangible assets with indefinite lives, including goodwill, as well as over those intangibles with finite life whose amortization
period exceeds 20 years from the date on which it was available for use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>l.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Impairment of long-live assets and their disposal</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Company and its subsidiaries review the book
value of their long-lived assets, including the goodwill to detect any impairment evidence that could indicate that their book
value could be non-recoverable, in accordance with Bulletin C-15, &ldquo;Impairment in the Value of Long-Lived Assets and Their
Disposal&rdquo;. To determine if an impairment exists, is considered the greater of present value (using a discount rate) of the
expected net cash flows that will be yielded during the estimated useful lives of the assets or its fair value. Impairment loss
is recorded considering the amount of book value that exceeds the greater of the values mentioned above. When there is an intention
of sell assets, these must be presented in the financial statements at lower of historical (or restated value as of December 31,
2007 if the asset was acquired in prior years) or fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>m.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Environmental Costs</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Based on information currently
available, Republic established a liability for an amount considered appropriate to cover costs of environmental remediation that
are probable of being incurred in the future. The amount was determined based on information currently available, current technology,
applicable environmental laws and current regulations, and also considered the effects of inflation and other social and economic
factors that could have an effect, in accordance with accounting Bulletin C-9, &ldquo;Liabilities, Provisions, Contingent Assets
and Liabilities and Commitments&rdquo; of MFRS. See note 20</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>n.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Use of estimates</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The preparation of consolidated financial statements
according with the MFRS requires management of the Company to make reasonable estimates that can affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and amounts
of revenues and expenses reported that arise during the year. Actual results could differ from these estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Company has made accounting estimates with
respect to the valuations for accounts receivable, inventories, long- term assets and useful lives, valuation of derivatives, deferred
tax assets and liabilities, benefits to employees, environmental obligations and others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 23.3pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>o.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Accruals and contingencies</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Accruals are recognized whenever (i) has a current
obligation (legal or assumed) as a result of a past event, (ii) it is probable that a transfer of assets or the rendering of services
will be required to settle such obligation and (iii) the obligation can be reasonably estimated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Accruals are recognized only when a cash disbursement
to settle the contingent obligation is probable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>p.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Employee benefits</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The subsidiaries of the Company that have employees
recognize the criteria established in MFRS D-3 &ldquo;Employee benefits&rdquo;. This MFRS establishes three types of benefits to
employees: direct short and long-term benefits, at the end of the labor relation and upon retirement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The liabilities due to employee benefits granted
by the entity are determined as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The liabilities for direct short-term
benefits are recognized as incurred, based on the current salaries, expressed at their nominal value. As of December 31, 2011,
2010 and 2009 there are no direct long-term benefits.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The liabilities due to termination benefits
of the labor relation before reaching retirement age are determined by considering the present value of the obligation due to benefits
defined as of the date of the balance sheet, using for said purpose certain assumptions and hypotheses determined by independent
actuaries. The remunerations included in the determination of these liabilities correspond to severance indemnities and seniority
premium attributable to death, disability, severance and voluntary retirement before retirement date, all of these determined in
accordance with the applicable labor laws. Actuarial gains and losses are immediately recognized in the results of the year. Transition
liabilities and the changes to the plan pending amortization as of December 31, 2007 are amortized through the straight-line method
in five years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The liabilities due to post-employment
benefits are determined by considering the present value of the obligation due to benefits defined as of the date of the balance
sheet. The remunerations included in the determination of these liabilities correspond to seniority premium for retirement. See
Note 14.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16pt 0 70.9pt">Actuarial gains and losses, as well as the changes
to the plan pending to be amortized are amortized on the basis of the remaining average work life of the workers that are expected
to receive the benefits. Transition liabilities as of December 31, 2007 are amortized through the straight-line method in five
years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The liabilities due to the retirement
and termination of the labor relation before reaching retirement age, as well as the related net costs are determined according
to the unit credit method, based on projected salaries, using for that purpose certain assumptions and hypotheses determined by
independent actuaries. See Note 14.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The deferred employee profit sharing
(EPS) is recognized on the basis of the assets and liabilities method established in MFRS D-4, &ldquo;Income taxes&rdquo;, which
is determined based on the temporary differences between accounting and tax values of the assets and liabilities of the entity,
in those cases where it is likely to realize the liability or benefit that may be originated and there are no signs that this situation
will change in such a way that the liabilities or benefits cannot materialize in the future. As of December 31, 2011 and 2010,
temporary differences are not material and consequently no provision was recorded.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>q.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Comprehensive income</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The amount of the comprehensive income or loss
is shown in a single line within the statement of changes in stockholders&rsquo; equity, which is the result of the total operation
of the company in the year and it is represented by the net profit or loss for the year, plus the effects of the translation of
foreign entities and the changes in the fair value of derivative financial instruments, according with the MFRS applied</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">directly in stockholders equity, as well as the
effect of minority interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>r.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Income Statement</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Costs and expenses showed in the statements of
income are derived from primary activities of the Company and that represent its main source of revenues. Considering the practices
of the industry were operates, the Company considers the best way to present its costs and expenses in the statement of income
is by function. This classification shows in generic headings, the types of costs and expenses based on the contribution to the
different levels of income or loss of such statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Operating income is presented in the consolidated
income statement, considering that this disclosure contributes to a better understanding of economic and financial performance
of the entity, determined according to the Guidance to Financial Reporting Standards (ONIF-1) issued by the CINIF.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>s.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Concentration risk</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Cash amounts in excess of current requirements
are deposited in bank institutions with qualified credit ratings, which are located in different geographical regions. Practice
of the company is designed not to limit exposure to a single financial institution. The Company uses derivative instruments as
mentioned in Note 4-d and these contracts contain the risk that the counterparty does not fully comply with its obligations, which
could result in a material loss. The Company sells its products in the domestic market to a large base, which is geographically
diverse; consequently, there is no significant concentration in a specific customer or region. In the case of the U.S. market,
in 2011 and 2010, the five largest customers of Republic accounted for approximately 24.3% and 23.4%, respectively, of consolidate
revenue in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>t.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Revenue recognition</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Revenue is recognized in the period in which the
risks and benefits of inventories are transferred to the customer that acquired them, which usually occurs with the delivery of
products to customers in fulfilling their orders. Net sales represent the goods sold at list price, less returns received and discounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>u.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Income taxes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The income taxes (Income Tax and/or Business Flat
Tax) recorded in the year&rsquo;s results are based on criteria established in MFRS D-4 &ldquo;Income Taxes&rdquo;. According to
that MFRS, the current tax determined on the basis of the tax provisions in force is recorded in the income of the year to which
it is attributable. The deferred taxes are determined on the basis of the assets and liabilities method established in mentioned
MFRS, which consists of comparing the accounting and tax values of the assets and liabilities of the entity, from which both deductible
and accruable temporary differences arise. The respective tax rate is applied to all the resulting temporary differences and they
are recognized as a deferred asset or liability. The deferred asset tax, is recorded only when there is a possibility for their
recovery.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Company follows the practice of recognizing
the benefits for the amortization of income tax carry forward losses in the year that the amortization occurred except when the
losses arise from expenses in excess and it is considered that these carry forward tax losses will be amortized in future years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">The Company applied on a supplementary basis to
MFRS, ASC 740-10-25 &ldquo;Income taxes&rdquo; Acquired Temporary Differences in Certain Purchases Transactions that are not Account
for as Business Combinations of the Generally Accepted Accounting Principles in the USA, for the acquisition of companies with
tax losses carry-forward (NOLs). The deferred credit is amortized to result of operations in the same proportion to the realization
of the tax benefits that gave rise to the deferred credit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>v.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Earnings (loss) per share</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Income per share is calculated by dividing controlling
net income or loss, by the weighted average shares outstanding during each year presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>w.</B></FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font-size: 10pt"><B>Segments Information</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 49.65pt">Segment information is presented in accordance
with the region and due to the operation business is presented in accordance with the information used by management for decision
making purposes. See Note 19.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>5.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Foreign Currency Position</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 38.15pt 0 28.35pt">As of December 31, 2011 and 2010 financial statements
include foreign currency denominated assets and liabilities as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="14" STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">(Figures in thousands of dollars)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">2011</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD COLSPAN="5" STYLE="border-bottom: #A6A6A6 1pt solid; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Current Assets:</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents</FONT></TD>
    <TD STYLE="width: 10%; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">423,746</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">239,943</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Accounts receivable trade</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">135,093</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">130,446</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other accounts receivable</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">29,849</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">14,464</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total Assets</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">588,688</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">384,853</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Current liabilities:</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Suppliers</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">132,197</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">152,589</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Related parties</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">50,567</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">48,524</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other accounts payable
    and accrued expenses</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">47,297</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">22,742</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"></FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">230,061</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">223,855</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">Long term liabilities<FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,444</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">4,128</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total liabilities</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">233,505</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">227,983</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net assets</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">355,183</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">156,870</FONT></TD><TD STYLE="border-bottom: #A6A6A6 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 38.15pt 0 28.35pt">The exchange rates used to translate U.S. currency
amounts were Ps. 13.99 and Ps. 12.36 per U.S. dollar as of December 31, 2011 and 2010, respectively. As of April 24, 2012, issuance
date of the financial statements in Mexico, the exchange rate was Ps. 13.21 per one US dollar.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 38.15pt 0 28.35pt">A summary of transactions carried out for the
years ended December 31, 2011, 2010 and 2009, in U.S. dollars, excluding transactions of foreign subsidiaries is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="8" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Thousands
    of U. S. Dollars</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Sales</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">147,754</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">207,271</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">81,465</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Purchases (raw material)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,655</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">36,056</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,230</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other expenses (spare parts)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">20,111</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">11,913</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">11,719</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Paid interest</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">488</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,765</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 38.15pt 0 28.35pt">The Company has foreign subsidiaries, whose combined
assets and liabilities are summarized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="5" STYLE="padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Thousands
    of U.S. dollars</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 65%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Monetary current assets</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right; width: 10%"><FONT STYLE="font-size: 10pt">533,342</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right; width: 10%"><FONT STYLE="font-size: 10pt">294,778</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Inventories and prepaid expenses</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">281,456</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">266,972</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Short-term liabilities</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(221,699)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(219,317)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.9pt"><FONT STYLE="font-size: 10pt">Working capital</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">593,099</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">342,433</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">142,303</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">146,561</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other assets and deferred charges</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">12,032</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">12,806</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Long-term inventory</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">118,072</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">117,370</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Long-term liabilities</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(62,546)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(52,172)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.9pt"><FONT STYLE="font-size: 10pt">Stockholder&acute;s equity</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">802,960</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">US$</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt">566,998</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>6.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Balances and transactions with related parties</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 38.15pt 0 28.35pt">Balances with related parties a as of December
31, 2011 and 2010 were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; text-decoration: underline"><FONT STYLE="font-size: 10pt"><U>Accounts receivable:</U></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 65%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Industrias CH, S. A. B. de C. V (1).</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">104,207</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">112,952</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Compa&ntilde;&iacute;a Laminadora Vista Hermosa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,029</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,854</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Operadora Construalco, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">483</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">321</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ferrovisa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">11,084</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">9,755</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Compa&ntilde;&iacute;a Manufacturera de Tubos, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">39,943</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">263</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Operadora Industrial de Herramientas, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,423</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Joist del Golfo, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">7,033</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Perfiles Comerciales Sigosa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,625</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Others</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">191</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">169,018</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">126,145</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; text-decoration: underline"><FONT STYLE="font-size: 10pt"><U>Accounts payable:</U></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Industrias CH, S. A. B. de C. V. (2)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">172,513</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">154,750</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Tuberias Procarsa, S. A. de C. V. (2)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">416,107</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">366,615</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Procarsa Tube and Pipe (2)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">41,665</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">13,251</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Pytsa Industrial de Mexico, S. A. de C. V. (2)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">71,206</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">62,685</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Aceros y Laminados Sigosa, S.A. de C.V. (2)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,825</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">19,099</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Perfiles y Comerciales Sigosa, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,084</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Nueva Pytsa Industrial, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">7,520</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Pytsa Industrial, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,154</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,985</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Others</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">915</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">687</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">706,385</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">629,676</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 7.55pt 0 8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35pt; text-align: right"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">This account receivable with ICH consists in recoverable
income tax derived from the fact that some of the companies determine consolidated income tax. See note 18.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35pt; text-align: right"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="width: 5pt"></TD><TD><FONT STYLE="font-size: 10pt">As of December 31, 2011 and 2010, the amount payable
to these companies is related to loans that are denominated in US dollar. These promissory notes do not specify a maturity date
and bear annual interest at 0.25%.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 7.55pt 0 8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 29.05pt 0 28.35pt">Other accounts receivable and payable are
generated by purchase and sale of finished goods as part of the normal operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 283.85pt 0 284.8pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 29.05pt 0 28.35pt">At the years ended December 31, 2011, 2010
and 2009, the significant transactions carried out with related parties are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Sales</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">30,613</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">42,927</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">149,682</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Purchases</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">65,966</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">80,792</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">38,483</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Interest expense</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,474</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,862</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,916</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Administrative services expenditures</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">14,449</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">14,284</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">15,071</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Direct short-term benefits</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">31,120</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">21,024</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">28,900</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>7.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Recoverable taxes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">As of December 31, 2011 and 2010, the amount of recoverable
taxes was as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 65%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Value Added Tax</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">291,693</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">562,746</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income Taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">181,836</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">81,562</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Business Flat Tax</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">27,159</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">33,674</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.9pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">500,688</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">677,982</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>8.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Inventories</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">As of December 31, 2011 and 2010 inventories are
comprised of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 65%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Finished goods</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,300,861</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,907,746</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Work in process</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">67,318</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">199,215</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Billet</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,381,204</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,447,574</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Raw materials and supplies</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,470,682</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,215,045</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Materials, spare parts and rollers</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">640,794</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">363,885</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 22.95pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,860,859</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,133,465</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 22.95pt"><FONT STYLE="font-size: 10pt">Less allowance for slow moving</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(130,924)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,808)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,729,935</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,129,657</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Materials in transit</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">30,185</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">88,647</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,760,120</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,218,304</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>9.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Prepaid expenses.</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">In compliance with the MFRS C-4 &ldquo;Inventories&rdquo;
and MFRS C-5 &ldquo;Prepaid expenses&rdquo; the down payment paid to supplier in 2010 that were originally presented as part of
inventories amounting Ps. 166,488 were reclassified to prepaid expenses. The balances of down payment as of December 31, 2011 and
2010 amounted Ps.193,985 and Ps. 262,708, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>10.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Property, plant and equipment (in millions of pesos)</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 28.35pt"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Buildings</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Machinery
    and equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Transportation
    equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Furniture
    and computer equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Land</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Construction
    in progress</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid; padding-right: -5.35pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 27%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Investment:</B></FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -4.45pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-indent: -7.1pt"><FONT STYLE="font-size: 8pt"><B>Amount
    as of December,31 2009</B></FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2,914</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">12,974</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">105</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">127</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">820</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">359</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">17,299</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Additions</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">84</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">268</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">141</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">497</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Disposals</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(1)</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(1)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Conversion
    effect</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(13)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(130)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(1)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(5)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(13)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(162)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: -2.25pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-indent: -8.8pt"><FONT STYLE="font-size: 8pt"><B>Amount
    as of December 31, 2010</B></FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2,985</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">13,112</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">106</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">128</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">815</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">487</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">17,633</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Additions</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">200</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">93</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">32</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">137</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">462</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Disposals</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(31)</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(1)</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(17)</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(49)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Transfers</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">415</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(415)</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Conversion
    effect</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">39</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">347</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">3</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">13</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">6</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">408</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: -2.25pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-indent: -8.8pt"><FONT STYLE="font-size: 8pt"><B>Amount
    as of December 31, 2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">3,224</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">13,936</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">138</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">130</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">948</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">78</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">18,454</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Accumulated
    depreciati&oacute;n:</B></FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 6pt 1.7pt 0 8.8pt; text-indent: -8.8pt"><FONT STYLE="font-size: 8pt"><B>Amount
                                                          as of</B></FONT></P>
        <P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 1.7pt 0 8.8pt"><FONT STYLE="font-size: 8pt"><B>December 31,
        2009</B></FONT></P></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">743</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">6,668</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">43</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">51</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">7,505</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Depreciation
    of the year</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">66</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">661</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">731</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Conversion
    effect</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(1)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(54)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(1)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(56)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 10pt 1.7pt 0 8.8pt; text-indent: -7.1pt"><FONT STYLE="font-size: 8pt"><B>Amount
                                                          as of</B></FONT></P>
        <P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 1.7pt 0 8.8pt; text-indent: -7.1pt"><FONT STYLE="font-size: 8pt"><B>December
        31, 2010</B></FONT></P></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">808</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">7,275</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">45</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">52</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">8,180</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Depreciation
    of the year</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">44</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">600</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">1</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">647</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Disposals</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(19)</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.85pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">(19)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 8.8pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Conversion
    Effect</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">3</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">166</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">1</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">170</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 6pt 1.7pt 0 8.8pt; text-indent: -8.8pt"><FONT STYLE="font-size: 8pt"><B>Amount
                                                          as of</B></FONT></P>
        <P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 1.7pt 0 8.8pt"><FONT STYLE="font-size: 8pt"><B>December 31,
        2011</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">855</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">8,022</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">47</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">54</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">8,978</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.2pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt"><B>Net
    Value:</B></FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.25pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.35pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">December 31, 2009</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2,171</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">6,306</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">62</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">76</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">820</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">359</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">9,794</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.35pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">December 31, 2010</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2,177</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">5,837</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">61</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">76</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">815</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">487</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">9,453</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.35pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">December 31, 2011</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">2,369</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">5,914</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">91</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">76</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">948</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">78</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -2.5pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 8pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-size: 8pt">9,476</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>





<!-- Field: Page; Sequence: 22 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; padding-bottom: 12pt; border-bottom: Black 4px solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->



<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 24pt 0 28.35pt">Constructions in progress are primarily improvements
to increase the installed capacity and yield of machinery and equipment. The estimated completion date of these constructions in
progress is 2012 and the amount pending to be invested is Ps. 9 approximately.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 24pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 24pt 0 28.35pt">As of December 31, 2011 and 2010,
balances in property, plant and equipment include capitalized comprehensive financial cost as a complement to the acquisition cost
amounting Ps. 524.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 24pt 0 28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>11.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Intangible and other noncurrent assets</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 24pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 24pt 0 28.35pt">As of December 31, 2011 and 2010, the item is
comprised as follows.</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 24pt 0 28.35pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Cost</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Accrued
    amortization</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Net
    value</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Net
    Value</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -6.25pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amortization
    Period</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 31%; padding-right: -1pt"><FONT STYLE="font-size: 10pt">Recorded trade mark</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">75,352</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">75,352</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">66,489</FONT></TD>
    <TD STYLE="width: 12%; padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Kobe Tech Contract</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">87,818</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">46,952</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">40,866</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">39,586</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">12</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Customer list</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">46,001</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">14,760</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">31,241</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">28,694</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Total Republic (1)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">209,171</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">61,712</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">147,459</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">134,769</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 8.25pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Customers list</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,205,700</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">878,196</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,327,504</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 8.25pt; text-align: right"><FONT STYLE="font-size: 10pt">1,572,582</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">9</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Non compete contract</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">394,700</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">353,585</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">41,115</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -1pt; padding-left: 15.7pt; text-align: right"><FONT STYLE="font-size: 10pt">139,790</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">4</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Trademark San 42 (2)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">329,600</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">329,600</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">329,600</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 2pt"><FONT STYLE="font-size: 10pt">Technological platform</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">8,800</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">6,307</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">2,493</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">4,253</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Goodwill Grupo San (2)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,814,160</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,814,160</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,814,160</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Total Grupo San (3)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,752,960</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,238,088</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">3,514,872</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">3,860,385</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,962,131</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,299,800</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">3,662,331</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">3,995,154</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Advance to suppliers of machinery and equipment.
    See Note 20</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">42,070</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">42,070</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Other assets</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">96,602</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">96,602</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">105,987</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,100,803</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,299,800</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">3,801,003</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">4,101,141</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -1pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -6.25pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 24pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">*</TD><TD>Intangibles assets with undefined life.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt; text-align: right"></TD><TD STYLE="width: 21.3pt">(1)</TD><TD>Intangible assets from acquisition of Republic.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">(2)</TD><TD STYLE="padding-right: 30.05pt">In the period ended December 31, 2009, the Company recognized an impairment loss of Ps. 2,368,000,
and decreased the value of the trademark San 42 and Goodwill in the amount of Ps. 16,000 and Ps. 2,352,000, respectively.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt; text-align: right"></TD><TD STYLE="width: 21.3pt">(3)</TD><TD>Intangible assets from acquisition of Grupo San.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17.9pt 0 28.35pt">Pursuant to the adoption of the new MFRS C-8 &ldquo;intangible
assets&rdquo;, in 2009 the preoperative expenses amounting Ps. 151,826 were charged to retained earnings, net of its corresponding
deferred income tax liability of Ps. 42,511. The net amount charged to retained earnings was $&nbsp;109,315.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17.9pt 0 28.35pt">The amortization of these assets recorded in the
income statements for the years ended December 31, 2011, 2010 and 2009, amounted Ps. 354,098, Ps. 367,178 and Ps. 365,625, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>12.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Medium Term Notes and Notes Payable</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Medium Term Notes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23pt 0 28.35pt">On October 22, 1997 and August 17, 1998, the Company
offered to holders of medium-term notes, to exchange their bonds at par, for new bonds denominated senior subordinated notes. The
new notes bonds bear semi-annual interest each at an annual rate of 10.5% interest and capital repayments were semiannual from
May 15, 2000 and until November 15, 2007. As of December 31, 2011, the amount of new notes not exchanged totaled US$ 0.3 plus accrued
interest. As of December 31, 2011 and 2010 liabilities in pesos for the new notes not exchanged amounted to Ps. 4,225 and Ps. 3,732
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23pt 0 28.35pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>13.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Derivative financial instruments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23pt 0 28.35pt">The Company used derivative financial instruments,
primarily to offset the exposure to variability in the price of natural gas. Derivative financial instruments used by the Company
consist of natural gas swap contracts. These contracts are recognized on the balance sheet at fair value. The swaps from the Mexican
operations are highly effective in mitigating the exposure to natural gas fluctuations, therefore those swaps are considered as
cash flow hedges, and thus, the fair value of the swap is recorded in comprehensive income in stockholders&rsquo; equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23pt 0 28.35pt">In Mexico, as of December 31, 2011, the Company has
contracted natural gas swaps with PEMEX Gas and Basic Petrochemicals (PGBP). In case of Republic the agreements were celebrated
with Hess Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23pt 0 28.35pt">The following table shows the existing natural gas
swap as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Date
        of</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Contract</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Starting</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Date</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Ending</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Date</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Type</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Swap</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Price</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>(US$)
        /</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>MMBTU
        / </B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>G.
        CAL</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Quantity</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Units</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid"><P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Fair
        Value</B></FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">10/09/2008</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.33</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22,500</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD STYLE="padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8,447</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">29/10/2010</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4.50</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">80,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8,710</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">02/09/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.47</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,541</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">04/11/2010</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4.50</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">7,500</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">817</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">02/09/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.47</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">6,875</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">2,648</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">04/11/2010</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4.50</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">15,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,633</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22/11/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">31/01/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3.57</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">527,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">0</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22/11/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">29/02/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3.59</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">493,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4,133</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22/11/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">31/03/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3.58</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">527,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4,146</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22/11/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/04/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3.62</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">150,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,132</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22/11/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">31/05/2012</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3.66</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">155,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,144</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">22/11/2011</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2012</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3.71</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">150,000</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,105</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.05pt; margin-bottom: 0"><FONT STYLE="font-size: 10pt">Net
        derivative instruments liability</FONT></P></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">35,456</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">Net liability booked in accounts payable</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">7,306</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-top: 4.1pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-top: 4.1pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">42,762</FONT></TD></TR>
</TABLE>
<P STYLE="font: medium Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 25.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 25.3pt">The following table shows the existing natural gas swap
as of December 31, 2010:</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Date
        of</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Contract</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Starting</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Date</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Ending</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Date</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Type</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Swap</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Price</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>(US$)
        /</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>MMBTU
        / </B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>G.
        CAL</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Quantity</B></FONT></P></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Units</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Fair
        Value</B></FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">25/06/2008</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2008</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2011</FONT></TD>
    <TD STYLE="padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">Swap</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">11.45</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">85,000</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">G.CAL. </FONT></TD>
    <TD STYLE="padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">37,578</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">25/06/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2011</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">11.45</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">45,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">19,894</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">25/06/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2009</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2011</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">11.12</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3,373</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">02/09/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2009</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2011</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.44</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,025</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">02/09/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.47</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">2,210</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">25/06/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2009</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2011</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">11.12</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">24,000</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">10,121</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">02/09/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/01/2009</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2011</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.44</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,750</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">449</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">02/09/2008</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">01/07/2011</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">30/06/2012</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">D.S. Swap</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">8.47</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">6,875</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">3,799</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">November</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">November</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">and</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">and</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">December</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">December</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">January to</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">200,000 to</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">April,
    2012</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">Future</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">4.00
    to 4.41</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">350,000</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">MMBTU</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">1,259</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">Net derivative instruments liability</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">79,708</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">Net liability booked in accounts
    payable</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">12,067</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">91,775</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 13.55pt 0 28.35pt">As of December 31, 2011, the Company recognized
a liability amounting to Ps. 42,762 and deferred income tax asset amounting to Ps. 13,429. The amount recorded in equity as part
of comprehensive income in the year 2011 represented an income amounting to Ps. 34,017, which Ps.37,904 were related to the controlling
interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 13.55pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 13.55pt 0 28.35pt">As of December 31, 2010, the Company
recognized a liability amounting to Ps. 91,775 and income tax asset deferred amounting to Ps. 27,612. The amount recorded in
equity as part of comprehensive income in the year 2010 represented an income amounting to Ps. 87,864, which Ps. 88,378 were
related to the controlling interest.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 8.85pt 0 28.35pt">Based on its inventory turnover, the Company believes
that the natural gas burned and incorporated in its products during a given month is reflected in the cost of sales of the subsequent
month; consequently, the realized effects of this hedge are reclassified from the comprehensive income account to results of operations
in the following month. In the years ended December 31, 2011, 2010 and 2009, the Company recorded an increase of Ps. 205,278, Ps.
298,647 and Ps. 419,200, respectively to its cost of sales resulting from settled transactions.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.2pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 9.8pt 0 28.35pt">In the case of Republic, its gas future contracts
are also used to cover changes in the cost of natural gas. The contracts are usually no longer than one year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.6pt 0 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>14.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Employee benefits</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">Determination of the liability for employee benefits
as of December 31, 2011, 2010 and 2009 is summarized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.4pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.75pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23.65pt 0 0; text-align: center"></P>

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Post-<BR>
employment benefits</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Termination
    benefits</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></P>

<FONT STYLE="font-size: 10pt"></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></P>

<FONT STYLE="font-size: 10pt"></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; text-align: center; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23.65pt 0 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 23.65pt 0 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></P>
</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36%; text-align: left; vertical-align: bottom"><P STYLE="font: 6pt Times New Roman, Times, Serif; margin-top: 0.25pt; margin-bottom: 0"><FONT STYLE="font-size: 10pt">Projected
                                                                     benefits obligation</FONT></P></TD>
    <TD STYLE="width: 3%; border-top: #ACA89A 1.5pt solid; text-align: left; vertical-align: bottom"><P STYLE="font: xx-small Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">Ps.</FONT></P></TD>
    <TD STYLE="width: 13%; border-top: #ACA89A 1.5pt solid; text-align: left; vertical-align: bottom; padding-right: 3"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 10pt">50,093</FONT></P></TD>
    <TD STYLE="width: 15%; border-top: #ACA89A 1.5pt solid; text-align: left; vertical-align: bottom; padding-right: 3"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 10pt">Ps.&#9;29,800</FONT></P></TD>
    <TD STYLE="width: 11%; border-top: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom; padding-right: 3"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 10pt">Ps.&#9;79,893</FONT></P></TD>
    <TD STYLE="width: 10%; border-top: #ACA89A 1.5pt solid; text-align: left; vertical-align: bottom; padding-right: 3"><P STYLE="font: 6pt Times New Roman, Times, Serif; margin-top: 0.25pt; margin-bottom: 0; text-align: right"><FONT STYLE="font-size: 10pt">Ps.&#9;75,325</FONT></P></TD>
    <TD STYLE="width: 12%; border-top: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom"><P STYLE="font: 6pt Times New Roman, Times, Serif; margin-top: 0.25pt; margin-bottom: 0"><FONT STYLE="font-size: 10pt">Ps.&#9;77,688
                                                                                                     </FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Net transition liability pending</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">to be amortized</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(16,709)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(2,235)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(18,944)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(26,423)</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">(37,751)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Prior service cost and plan</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">amendments</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(3,099)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(36)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(3,135)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(228)</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">(2,616)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Variations in assumptions and</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">experience adjustments</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">10</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(10)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(3,341)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(4,181)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Accumulated benefit obligation</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; vertical-align: middle; padding-right: 3"><FONT STYLE="font-size: 10pt">30,295</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; vertical-align: middle; padding-right: 3"><FONT STYLE="font-size: 10pt">Ps.&#9;27,519</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; vertical-align: middle; padding-right: 3"><FONT STYLE="font-size: 10pt">Ps.&#9;57,814</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; vertical-align: middle; padding-right: 3"><FONT STYLE="font-size: 10pt">Ps.&#9;45,333</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; vertical-align: middle; padding-right: 3"><FONT STYLE="font-size: 10pt">Ps.&#9;33,140</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.5pt 0 0 20.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.3pt 0 0">&nbsp;</P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 25.3pt">Components of net cost of benefits plan to employees
are as follows:</P>

<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 0 0 212.5pt; text-align: center; text-indent: -0.05pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 0 0 191.4pt; text-align: center; text-indent: -0.05pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Post- <BR>
employment <BR>
benefits&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Termination <BR>
benefits&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>2011
    <BR>
Total&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>2010 <BR>
Total&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-top: 4.05pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>2009
    <BR>
Total&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 33%; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">Service cost</FONT></TD>
    <TD STYLE="width: 3%; border-top: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,659</FONT></TD>
    <TD STYLE="width: 4%; border-top: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">3,155</FONT></TD>
    <TD STYLE="width: 3%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;Ps.</FONT></TD>
    <TD STYLE="width: 9%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">5,814</FONT></TD>
    <TD STYLE="width: 3%; border-top: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;Ps.</FONT></TD>
    <TD STYLE="width: 9%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">6,554</FONT></TD>
    <TD STYLE="width: 3%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;Ps.</FONT></TD>
    <TD STYLE="width: 11%; border-top: #ACA89A 1.5pt solid; padding-top: 4.05pt; text-align: right"><FONT STYLE="font-size: 10pt">8,098</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Financial Cost</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">3,474</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,926</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">5,400</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">5,962</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">9,609</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Amortization of transition</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">liability</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">4,662</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,906</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">6,568</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">6,903</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,342</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Amortization of prior service</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">cost and plan amendments</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(994)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">234</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(760)</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">52</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">6,872</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Anticipated reduction of</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Obligations</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">117</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,377</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,494</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(4,568)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Variations amortization in</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">assumptions and experience</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Adjustments</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(304)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">(1,408)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">(1,712)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">3,774</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">9,787</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Net period cost</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">9,614</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">8,190</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">17,804</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">18,677.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">35,708</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.85pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.85pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.85pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&#9;&#9;&#9;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 25.3pt">The most important assumptions used in determining
the net period cost of the plans are:</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 69%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; border-bottom: #ACA89A 1.5pt solid; padding-top: 3.7pt; padding-right: -1pt; padding-left: 20.2pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="width: 10%; border-bottom: #ACA89A 1.5pt solid; padding-top: 3.7pt; padding-right: -1pt; padding-left: 18.55pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="width: 10%; border-bottom: #ACA89A 1.5pt solid; padding-top: 3.7pt; padding-right: -1pt; padding-left: 18.5pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.05pt; padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Discount rate</FONT></TD>
    <TD STYLE="padding-top: 4.05pt; padding-right: -1pt; padding-left: 21.1pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>7.5%</B></FONT></TD>
    <TD STYLE="padding-top: 4.05pt; padding-right: -1pt; padding-left: 21.1pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>7.5%</B></FONT></TD>
    <TD STYLE="padding-top: 4.05pt; padding-right: -1pt; padding-left: 19.4pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>8.0%</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Actual rate of future salary increases</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 21.1pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>6.2%</B></FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 21.1pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>5.5%</B></FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 19.4pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>5.0%</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 25.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 25.3pt">As of December 31, 2011, the Mexican subsidiaries
with employees did not generate Employees Profit Sharing (EPS). In 2010 and 2009, the expense EPS was Ps. 95 and Ps. 7,261.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 70%; padding-top: 1.7pt; padding-right: -1pt; padding-left: 28.35pt; font-weight: bold; text-indent: -22.35pt"><FONT STYLE="font-size: 10pt"><B>15.</B></FONT><B><FONT STYLE="font-size: xx-small">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"> Other employment benefit plans</FONT></B></TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.25pt 12.4pt 0 25.3pt">Republic is the only subsidiary of the Company
which offers additional benefits and pension plans to their employees. Benefit plans to these employees are described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>a)</B></FONT></TD><TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Defined Contribution Plans</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">Seventy-nine percent of the Republic&acute;s employees
are covered by a collective bargaining agreement with the United Steelworkers (USW).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 25.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">The Company is required to make a contribution
to the VEBA Benefit Trust for every hour worked by eligible employees. This welfare plan makes provision for retiree
healthcare benefits, and is not a &ldquo;qualified&rdquo; plan under ERISA regulations. The labor agreement requires a
contribution, by the Company, to the retirement healthcare plan of US$3.00 for every hour worked, not to be less than US$2.85
million per quarter, but not to exceed US$11.4 million per year. For the years ended December 31, 2011, 2010 and 2009, the
Company recorded expenses amounting to US$8.5 million, US$11.4 million and US$ 11.4 million, respectively related to this
welfare plan. Contributions are also made to the SWP Trust, a &ldquo;qualified&rdquo; pension benefit plan under ERISA
regulations, at a rate of US$1.68 per hour as defined in the labor agreement. For the years ended December 31, 2011, 2010 and
2009, the Company recorded expenses amounting to US$6.0 million, US$7.1 million and US$ 7.1 million, respectively, related to
this pension benefit plan. The Company recorded combined expenses amounting to US$14.5 million, US$18.5 million and US$ 18.5
million for the years ended December 31, 2011, 2010 and 2009, respectively, related to the funding obligations of the
retirement healthcare and pension benefits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 25.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">On March 29, 2012, the USW and Republic ratified
a new collective bargaining agreement. This collective bargain expires on august 15, 2016. The new labor agreement includes wage
and benefit increases including two lump sum payments payable to active USW employees during 2012, and general wage increases in
2013, 2014, and 2015. Company contributions to fund the Republic Retirement VEBA Benefit Trust (Benefit Trust) were reduced by
US$2.0 million per year beginning in 2012. In addition, the quarterly contribution amount was suspended effective the fourth quarter
of 2011 and continuing through the third quarter of 2012. Contributions to the Benefit Trust will resume during four quarter 2012
at a quarterly rate of approximately US$2.4 million with an increase to a US$2.6 million quarterly rate beginning in the second
quarter 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">The Company has a defined contribution 401K retirement
plan that covers substantially all salaried and nonunion hourly employees. This plan is designed to provide retirement benefits
through Company contributions and voluntary deferrals of employees&rsquo; compensation. The Company funds contributions to this
plan each pay period based upon the participants age and service as of January first of each year. The amount of the Company&rsquo;s
contribution is equal to the monthly base salary multiplied by the appropriate percentage based on age and years of service. The
contribution becomes 100% vested upon completion of three years of vesting service. In addition, employees are permitted to make
contributions into a 401(k) retirement plan through payroll deferrals. The Company provides a 25.0% matching contribution for the
first 5.0% of payroll that an employee elects to contribute. Employees are 100.0% vested in both their and the Company&rsquo;s
matching 401(k) contributions. For years ended December 31, 2011, 2010 and 2009, the Company recorded expense of US$2.1 million,
US$2.0 million and US$ 1.9 million, respectively, related to this defined contribution retirement plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 46.75pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">Employees who are covered by the USW labor agreement
are eligible to participate in the defined contribution 401K retirement plan through voluntary deferrals of employees&rsquo; compensation.
There are no Company contributions or employer matching contributions relating to these employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 25.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>b)</B></FONT></TD><TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Profit Sharing Plans</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 25.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">The labor agreement includes a profit sharing plan
to which the Company is required to contribute 2.5% of its quarterly pre-tax income, as defined in the labor agreement. At the
end of the year, the contribution will be based upon annual pre-tax income up to US$50.0 million multiplied by 2.5%, US$50.0 million
to US$100.0 million multiplied by 3.0%, and above US$100.0 million multiplied by 3.5%, less the previous payouts during the year.
Profit sharing earned, accrued and expensed was US$1.0 million for the year ended December 31, 2011. There was no profit sharing
earned, accrued or recorded for the years ended December 31, 2010 and 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 25.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">Republic Steel has a profit sharing plan for all
salaried and nonunion hourly employees that is a function of achieving business plan EBITDA objectives. The Company paid US$0.3
million for profit sharing at December 31, 2011 related to 2011 performance. However, the amounts paid in 2011 were discretionary
as the financial thresholds of the profit sharing plan had not been reached in any quarter or for the year. No profit sharing was
accrued or expensed for the year ended December 31, 2010 and 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 25.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>c)</B></FONT></TD><TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Incentive Compensation Plans</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 25.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">The Company has various compensation plans that are
based on attaining certain Business Plan and other performance targets for the financial calendar year. The objectives are measured
on a quarterly basis. Individuals designated as participants in these plans are excluded from the Company&rsquo;s regular profit
sharing plan. For the years ended December 31, 2011, 2010 and 2009, there were no incentives earned under these plans as the target
thresholds for the respective years were not achieved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.4pt 0 0.75in">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>16.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Stockholder&acute;s equity</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The most significant characteristics of stockholders&rsquo;
equity accounts are described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>a.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Capital stock structure</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.3pt 0 49.65pt">As of December 31, 2011, the capital stock of Grupo
Simec, S.A.B. de C.V., is represented by 497,709,214 common shares corresponding to &ldquo;B&rdquo; series of free circulation,
without nominal value. The minimum fixed capital not subject to withdrawal is Ps. 441,786 (nominal amount).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>b.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Legal Reserve</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.3pt 0 49.65pt">The Company&rsquo;s net income is subject to the
application of 5% to the legal reserve until it represents 20% of the nominal capital stock. The legal reserve is not subject to
cash distribution, but may be capitalized and is included in retained earnings. At December 31, 2011, the legal reserve of the
Company amounted to Ps. 484,045 (nominal pesos), representing 20% of nominal capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>c.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Dividends and capital refunds</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.3pt 0 49.65pt">Retained earnings are subject to taxes if distributions
are paid in cash, except when they are paid from &ldquo;net tax profit account&rdquo; or &ldquo;CUFIN&rdquo;. Also, the capital
refunds that proportionally exceed the contributed capital account (CUCA), are considered dividends and subject to tax. As of December
31, 2011, the CUFIN of Grupo Simec, S. A.B. de C.V. and its subsidiaries amounted to Ps. 1,083,964. At that date the balance of
the CUCA of Grupo Simec, S. A.B. de C.V. amounted to Ps. 8,568,530.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt"><B>d.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Comprehensive Income</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.3pt 0 49.65pt">Comprehensive income reported on the consolidated
statement of changes in stockholders&rsquo; equity represents the result of all the Company&rsquo;s activities during the year
and includes the following captions, which in conformity with Mexican Financial Reporting Standards, were applied directly to stockholders&rsquo;
equity, except for the net (loss) income:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -2.15pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 15%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Net income (loss)</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">2,952,231</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">668,954</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,221,194)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Fair value of derivative financial instruments</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">48,200</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">124,464</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">159,453</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.15pt; text-align: justify; text-indent: -3.15pt"><FONT STYLE="font-size: 10pt">Deferred taxes in
    fair value of derivative financial instruments</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(14,183)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(36,600)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(40,312)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Translation effect of foreign subsidiaries,
    net</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">664,150</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(216,945)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(158,317)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Total comprehensive income (loss)</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">3,650,398</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">539,873</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,260,370)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Noncontrolling interest (1)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">331,775</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(375,861)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(956,259)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Controlling interest</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">3,318,623</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">915,734</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(304,111)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.55pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt TimesNewRoman">(1)</FONT></TD><TD STYLE="padding-right: 36.15pt"><FONT STYLE="font: 10pt TimesNewRoman">The non-controlling interest is the due to the investment
of Industrias CH, S.A.B. de C.V. (Holding Company) in SimRep Corporation and subsidiaries.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.3pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>17.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Non-controlling interest</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">As mentioned in Note 3, Grupo Simec, S. A. B.
de C. V., owns practically 100% of the capital stock of its subsidiaries and 50.22% of SimRep Corporation and subsidiaries. The
non-controlling interest represents the equity in this subsidiary owned by minority shareholders, and is presented in the consolidated
balance sheet after the controlling interest. The consolidated income statement shows the total consolidated net income or loss
and controlling and non-controlling interest portions are presented after the consolidated net income or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"><B>&nbsp;</B></P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>18.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Income taxes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.05pt 0 23.25pt">The Company is subject to income tax (IT) and the
Business Flat Tax (BFT)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.05pt 0 23.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 4.8pt 0 23.3pt">Grupo Simec, S.A.B. de CV and some of its subsidiaries
consolidate their taxable income with its parent company ICH. In accordance with the provisions of the Income Tax Law, ICH and
each of the subsidiaries determine their taxes individually, and have the obligation to pay the minority portion of those taxes
directly to the Mexican Tax Authorities. The majority income tax, for consolidation purposes, is covered by the holding company.
Grupo Simec, S.A.B. de C.V. and its subsidiaries calculate and book its provision for taxes on a standalone basis.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.95pt 0 23.25pt">BFT was incurred at the rate of 17.5%. The basis
of the tax is determined by totaling the revenues collected, less certain deductions paid, including purchases of inventories and
investments in fixed assets. The tax incurred may be decreased by certain credits related to wages and salaries, Social Security
contributions, investments in fixed assets that were not deducted at the time the Law was enacted, part of the inventories, among
others, as well as the income tax effectively paid in the year. On such basis, the BFT will be paid only for the difference between
the income tax and the BFT incurred, when the latter is higher.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 25.1pt 0 23.25pt">With the entry into force of the BFT Act, the Act
of Asset Tax (IMPAC) was revoked, establishing a new procedure for requesting a refund of recoverable asset tax paid in the previous
ten years during which in no instances exceeded 10% of the asset tax paid in 2005, 2006 and 2007. Based on these changes, the Company
has determined that the cumulative recoverable IMPAC as of December 31, 2011 for Ps. 106,869 will not be recovered based on the
prospective analysis of its results from operations and accordingly this amount has been reserved in its entirety.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.2pt 0 23.25pt">In December 2009 some amendments to the Income
Tax Act were published effective January 1, 2010. The most significant change is the change in the income tax rate, which for 2010,
2011 and 2012 is 30%, in 2013 the rate will be 29% and from 2014 and thereafter will return to 28%.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 23.25pt; text-align: justify">Based on financial projections
made for the next years, and retrospectively on historical results, the Company has determined that certain subsidiaries of the
Group will be subject to IT and others to BFT. The deferred tax for the year was determined based on specific rules for each tax.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 23.25pt">The analysis of the income tax charged (credited) to
the results of 2011, 2010 and 2009 is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 46%; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -2.15pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 15%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 13%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 13%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Current Income Tax Mexican Subsidiaries</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(4,548)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">128,176</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">82,858</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Business Flat Tax</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">5,945</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">2,898</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">100,212</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Current Income Tax Foreign Subsidiaries</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(88,234)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">28,033</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(824,812)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Deferred income Tax Mexican Subsidiaries</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(38,627)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(148,928)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,250,496)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Deferred Business Flat Tax</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">180,465</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">9,501</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Deferred
    Income Tax Foreign Subsidiaries</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">54,836</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">92,756</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(172,914)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 2.25pt solid; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">109,837</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">112,436</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 2.25pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,065,152)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.3pt 0 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.3pt 0 0">&nbsp;</P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 22pt 0 21.3pt">In 2011, 2010 and 2009, the income tax attributable
to income before taxes, was different from the amount computed by applying the rate of 30% in 2011 and 2010, and 28% in 2009, to
income before these provisions and non-controlling interest, as a result of the items listed below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.95pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 52%; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -2.15pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 6%; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Expected tax expense (benefit)</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">918,620</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">234,417</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(920,177)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Increase (decrease) resulting from:</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Net effect of inflation</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(13,729)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">8,826</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,724)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Effect on Republic&rsquo;s effective income
    tax rate</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(8,689)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">16,871</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(152,501)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Effect of NOLs generated during the year
    (1)</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">42,492</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">249,282</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(43,414)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">BFT
    paid in excess of income tax and BFT deferred</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">186,410</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">12,399</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">39,353</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Benefit of amortization of tax losses
    and others</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,021,174)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(507,726)</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(334,622)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.3pt; padding-left: 3.1pt; text-align: justify; text-indent: -3.1pt"><FONT STYLE="font-size: 10pt">Change
    in the additional liability from other tax transactions</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,142,882)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.15pt; text-align: justify; text-indent: -3.15pt"><FONT STYLE="font-size: 10pt">Amortization of
    deferred credit</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(163,333)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Impairment loss</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">35,237</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">663,040</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Other, net (including effect of permanent
    differences)</FONT></TD>
    <TD STYLE="padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">5,907</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">63,130</FONT></TD>
    <TD STYLE="padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(7,892)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Income tax expense (benefit) tax</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">109,837</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">112,436</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,065,152)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-size: 10pt">Effective tax rate</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-size: 10pt">3.6%</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">14.4%</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(62.8%)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 42.55pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-size: 10pt">(1)</FONT><FONT STYLE="font-size: xx-small">&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 10pt">According with MFRS D-4 &ldquo;Income Taxes&rdquo;, those losses generated in a year, as well
as carry-forwards, are temporary differences on which it should be recognize a deferred income tax. The Company follows the practice
of recognizing the benefit from the amortization of tax loss carry-forwards in income for the period that are amortized, except
when the losses come from over-expenditures and is considered that these losses will be amortized in future years. The amounts
of Ps.&nbsp;42,492 and Ps.&nbsp;249,282 included in the caption &ldquo;Effect of NOLs generated during the year&rdquo; correspond
to the income tax of the tax losses generated by certain subsidiaries in the years 2011 and 2010, respectively, which were reserved
in those years. The amounts of Ps.&nbsp;1,021,174 and Ps.&nbsp;507,726 included in the caption &ldquo;Benefit of amortization of
tax losses and others&rdquo; correspond to the income tax benefit obtained by those companies that amortized tax losses during 2011
and 2010, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 42.55pt; text-indent: -21.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 36.15pt 0 21.3pt">The Company has tax losses that under the Income
Tax Law in force, can be amortized against taxable income generated in the next ten years. Tax losses can be updated by following
certain procedures set forth in the law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.8pt 36.15pt 0 42.55pt; text-indent: -21.25pt">&nbsp;</P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.05pt 0 21.3pt">At 31 December 2011 Grupo Simec, S. A. B. de C.
V. and certain subsidiaries have tax losses carry forwards pending to be amortized as follows:</P>

<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Year
        of </B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Origin</B></FONT></P></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: #BFBFBF 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Tax
        Losses</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Carry
        Forward</B></FONT></P></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: #BFBFBF 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Expiration</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 107px; text-align: center"><FONT STYLE="font-size: 10pt">2004</FONT></TD>
    <TD NOWRAP STYLE="width: 23px; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 109px; text-align: center"><FONT STYLE="font-size: 10pt">2014</FONT></TD>
    <TD STYLE="width: 25px; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 21px; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">226</FONT></TD>
    <TD STYLE="width: 20px; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2005</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2015</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">35,564</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2006</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2016</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">20,669</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2007</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2017</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,459</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2008</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2018</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">55,965</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2009</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2019</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">196,627</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2020</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2,407,796</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2011</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">2021</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">8,190,231</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(1)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">10,908,537</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="padding-right: 23pt"><FONT STYLE="font-size: 10pt">The loss includes $ 7,859,922, corresponding to tax loss obtained
in the sale of shares mentioned in Note 3-g, which, according to the Income Tax Act, can only be deducted against profit on sale
of shares that can be generated in the future.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.05pt 0 21.3pt">At December, 31, 2011, Republic has US$&nbsp;103.9
million of US Federal Net Operating Losses which expire in 2030 and 2031, approximately US$&nbsp;239 million in US State and Local
NOLs which mostly expire in years 2012 through 2026, and approximately US$&nbsp;1.9 million of Canadian Federal NOLs which expire
in 2030 and 2031.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 30.05pt 0 21.3pt">Below is a summary of the main temporary differences
that comprise deferred tax liabilities included in the financial statement at December 31, 2011 and 2010:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 65%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Deferred tax assets:</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Allowance for
    doubtful accounts<FONT STYLE="color: #333333"> </FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">63,826</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">59,154</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Accrued expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">143,404</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">160,787</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Advances from
    customers</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">643</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">25,907</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Tax Losses Carry
    forwards (NOLs) (1)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,893,413</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">851,269</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Republic tax credits
    (AMT)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">26,274</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">133,481</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Recoverable asset
    tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">106,869</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">99,610</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">EPS provision</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">250</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">39</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Derivative financial instruments</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">13,429</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">27,612</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">Deferred tax assets, net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,248,108</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,357,859</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; color: #333333"><FONT STYLE="font-size: 10pt">Less:</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Valuation allowance for deferred tax asset</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.7pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,650,815)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.7pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(747,113)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">Deferred tax assets, net</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">597,293</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">610,746</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; color: #333333"><FONT STYLE="font-size: 10pt">Deferred tax liabilities:</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Inventories</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">843,836</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">663,095</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Property, plant and
    equipment</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,069,841</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,873,599</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Intangibles assets
    from Grupo San acquisition</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">510,214</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">613,868</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Prepaid expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,888</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,133</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Others</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">7,033</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">138,751</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">Total deferred liabilities</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,437,812</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,295,446</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Deferred tax liabilities, net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,840,519</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,684,700</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Deferred business flat tax</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">231,366</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">50,901</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 15.85pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,071,885</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,735,601</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 2.15pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 21.25pt">(1)</TD><TD STYLE="padding-right: 8.8pt">At December 31, 2011 and 2010 the deferred tax asset from tax loss carry forward includes Ps.
619,775 and Ps. 433,722, respectively originated in Federal and Local fiscal losses of Republic.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.8pt 13.75pt 0 42.55pt; text-indent: -21.25pt">&nbsp;</P>



<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>



<!-- Field: Page; Sequence: 31 -->
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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>19.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Segments Information</B></FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 6.15pt 0 28.35pt">The Company segments its information by region,
due to the operational structure and the organization of its business. The Company&rsquo;s sales are made mainly in Mexico and
the United States of America. The Mexican segment includes the plants in Mexicali, Guadalajara, Tlaxcala and San Luis Potosi. The
USA segment includes the six plants from Republic located in the State of Ohio, Indiana, New York and the last one in Ontario,
Canada. The plant in Canada represents approximately 3% of the segment&rsquo;s total sales. Both segments are engaged in the manufacturing
and sale of long steel products intended primarily for the building and automotive industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="8" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -4.9pt; padding-left: 5.4pt; font-weight: bold; text-align: center; text-indent: -0.7pt"><FONT STYLE="font-size: 10pt"><B>Year
    ended December 31, 2011</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Mexico</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -3.25pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>USA</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Operations
    between segments</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -4.9pt; padding-left: 5.4pt; font-weight: bold; text-align: center; text-indent: -0.7pt"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="width: 44%; vertical-align: top; padding-top: 4.05pt; padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net
    sales</FONT></TD>
    <TD STYLE="width: 5%; vertical-align: bottom; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; vertical-align: top; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">15,174,922</FONT></TD>
    <TD STYLE="width: 3%; vertical-align: bottom; padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; vertical-align: top; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">14,127,627</FONT></TD>
    <TD STYLE="width: 3%; vertical-align: bottom; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 10%; vertical-align: bottom; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(32,051)</FONT></TD>
    <TD STYLE="width: 3%; vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; vertical-align: top; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">29,270,498</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Cost of sales</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">12,032,028</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">13,624,635</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(32,051)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">25,624,612</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Gross profit</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,142,894</FONT></TD>
    <TD STYLE="padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">502,992</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">3,645,886</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Selling, general and
    administrative expenses</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">722,591</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">331,561</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,054,152</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Operating income</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">2,420,303</FONT></TD>
    <TD STYLE="padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">171,431</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,591,734</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other expenses, net</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">103,670</FONT></TD>
    <TD STYLE="padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">10,036</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">113,706</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Financial (income) expenses, net</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(16,587)</FONT></TD>
    <TD STYLE="padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">14,177</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(2,410)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Foreign exchange income (loss), net</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(581,630)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(581,630)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income before income taxes</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">2,914,850</FONT></TD>
    <TD STYLE="padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">147,218</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">3,062,068</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income taxes (benefit)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">143,034</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(33,197)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">109,837</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net income</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">2,771,816</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -3.25pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">180,415</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -4.8pt; padding-left: 5.4pt; text-indent: 6.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-top: 4.05pt; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,952,231</FONT></TD></TR>
</TABLE>
<P STYLE="font: 6.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; padding-right: -1pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Other
    Data</B></FONT></TD>
    <TD STYLE="width: 17%; border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Mexico</B></FONT></TD>
    <TD STYLE="width: 14%; border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -3.25pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>USA</B></FONT></TD>
    <TD STYLE="width: 14%; border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -1pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Operations
    between segments</B></FONT></TD>
    <TD STYLE="width: 15%; border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -4.9pt; padding-left: 5.4pt; font-weight: bold; text-align: center; text-indent: -0.7pt"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 44%; padding-left: 5.4pt">Total assets</TD>
    <TD STYLE="width: 5%; padding-left: 5.4pt; text-align: right">Ps.</TD>
    <TD STYLE="width: 11%; text-align: right">23,497,561</TD>
    <TD STYLE="width: 3%; padding-left: 5.4pt; text-align: right">Ps.</TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right">9,098,293</TD>
    <TD STYLE="width: 3%; padding-left: 5.4pt; text-align: right">Ps.</TD>
    <TD STYLE="width: 10%; text-align: right">(1,326,388)</TD>
    <TD STYLE="width: 3%; padding-left: 5.4pt; text-align: right">Ps.</TD>
    <TD STYLE="width: 11%; padding-left: 5.4pt; text-align: right">31,269,466</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt">Depreciation and amortization</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">777,117</TD>
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">223,981</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-indent: 6.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">1,001,098</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt">Additions of property, plant and equipment, net</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">267,720</TD>
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">164,280</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-indent: 6.4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">432,000</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt">Total liabilities</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">3,485,345</TD>
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">4,841,686</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">(1,326,388)</TD>
    <TD STYLE="padding-left: 5.4pt; text-indent: 6.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right">7,000,643</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 282.85pt 0 284.8pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 282.85pt 0 284.8pt; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<!-- Field: Page; Sequence: 32 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; padding-bottom: 12pt; border-bottom: Black 4px solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->


<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="8" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Year
    ended December 31, 2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Mexico</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>USA</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Operations
    between segments</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net sales</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">12,623,536</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">11,952,900</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">24,576,436</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Cost of sales</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">10,328,758</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">11,920,745</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">22,249,503</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Gross profit</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,294,778</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">32,155</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,326,933</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Selling, general and administrative expenses</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">803,684</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">348,284</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,151,968</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Operating income (loss)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,491,094</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(316,129)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,174,965</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other expenses, net</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">124,126</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">61,952</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">186,078</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Financial (income) expenses, net</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(16,449)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">16,706</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">257</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Foreign exchange (loss) income, net</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">207,240</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">207,240</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income (loss) before income taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,176,177</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(394,787)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">781,390</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income taxes (benefit)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(31,785)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">144,221</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">112,436</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net income (loss)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,207,962</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-left: 5.4pt; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(539,008)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">668,954</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 130.05pt 0 6.4pt; text-indent: -6.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 130.05pt 0 6.4pt; text-indent: -6.4pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Other Data</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Mexico</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>USA</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Operations
    between segments</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">20,506,648</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">7,830,653</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(988,333)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">27,348,968</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Depreciation and amortization</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">859,601</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">238,607</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,098,208</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Additions of property, plant and equipment,
    net</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">434,910</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">61,451</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">496,361</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total liabilities</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,479,167</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,239,709</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(988,333)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,730,543</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 130.05pt 0 6.4pt; text-indent: -6.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 130.05pt 0 6.4pt; text-indent: -6.4pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="8" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Year
    ended December 31, 2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Mexico</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>USA</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Operations
    between segments</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net sales</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">11,366,780</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">7,864,749</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">19,231,529</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Cost of sales</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">8,951,396</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">10,028,087</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">18,979,483</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Gross profit</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,415,384</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,163,338)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">252,046</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Selling, general and administrative expenses</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">582,226</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">521,859</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,104,085</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Operating income (loss)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,833,158</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,685,197)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(852,039)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other income (expenses), net</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">70,102</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(40,111)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">29,991</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Impairment of intangibles assets</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,368,000)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,368,000)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Financial (income) expenses, net</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(21,726)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">39,595</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">17,869</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Foreign exchange (loss) income, net</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(78,429)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(78,429)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income (loss) before income taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(521,443)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,764,903)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,286,346)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Income taxes (benefit)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,065,363)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(999,789)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,065,152)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net income (loss)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">543,920</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,765,114)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 2.6pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,221,194)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 130.05pt 0 6.4pt; text-indent: -6.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 130.05pt 0 6.4pt; text-indent: -6.4pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Other Data</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Mexico</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>USA</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Operations
    between segments</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">19,540,570</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">8,663,405</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,298,164)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">26,905,811</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Depreciation and amortization</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">783,414</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">264,468</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,047,882</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Additions of property, plant and equipment,
    net</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">176,249</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">86,958</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">263,207</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total liabilities</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,596,802</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,528,620</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,298,164)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,827,258</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>



<!-- Field: Page; Sequence: 33 -->
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 25.3pt">The Company&rsquo;s net sales to foreign or regional
customers during 2011, 2010 and 2009 are as follows:</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Mexico</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">14,399,682</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">10,799,739</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">10,685,259</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">USA</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">13,709,807</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">13,078,357</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">7,829,024</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Canada</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">766,318</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">470,643</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">502,286</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Latin America</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">356,932</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">221,192</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">135,965</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Other (Europe and Asia)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">37,759</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,505</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">78,995</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">29,270,498</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">24,576,436</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">19,231,529</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>20.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Commitments and contingencies</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 29.05pt 0 28.35pt">To December 31, 2011 the company has the
following contingencies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">(a)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">Pacific Steel, Inc. (&ldquo;Pacific Steel&rdquo; or &ldquo;PS&rdquo;),
a subsidiary Company located in National City in San Diego County, California, USA which their main activity is the sale and purchase
of scrap has the following contingencies related to environment issues.<B><I> </I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt"><B>California Regional Water Control Board, CRWCB</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">On August 16, 2011, the California Regional Water
Quality Control Board (CRWCB) and the California Environmental Protection Agency (CALEPA) made a inspection to Pacific Steel to
verify the conditions of draining into the street waters. On September 1, 2011, PS received the &ldquo;Order to Cease &amp; Desist
Clean and Abate&rdquo;(OCDCA) from the CALEPA. On September 15, 2011 the CALEPA made a re-inspection visit, the CALEPA was satisfied
with the compliance to the OCDCA of PS At December 31, 2011, the California Regional Water Quality Control Board (CRWCB) has not
notified the conclusions of their inspection.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt"><B>Department of Toxic Substances Control, DTSC</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">In September 2002, the Department of Toxic Substances
Control (DTSC) inspected PS facilities based on an alleged complaint from neighbors due to PS&rsquo; Steel&rsquo;s excavating to
recover scrap metal on its property and on a neighbor&rsquo;s property which it rents from a third party. In this same month, DTSC
issued an enforcement order of imminent and substantial endangerment determination to PS, which alleges that certain soil piles,
soil management and metal recovery operations may cause an imminent and substantial danger to human health and the environment,
Consequently sanctioned to PS for violating hazardous waste laws and the State of California Security Code and imposed the obligation
to remediate the site. To give greater enforce this order July 2004, the DTSC, filed suit against PS at the Supreme Court of San
Diego. On July 26, 2004, the Court issued a decision in which it was imposed PS to pay Ps. 3,288 (USD $ 0.2 million), which were
paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 12.1pt 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">On June 6, 2010 the DTSC and the &ldquo;San Diego
Department of Environmental Health&rdquo; (DEH) made a inspection to PS, due to a general complaint. On August 10, 2010 this two
authorities made a second inspection and found seven different deviations. The DEH is satisfied with the compliance. Nevertheless,
on October 19, 2010 the technical area of the DTSC advice the legal area to impose important penalties. At December 31 ,2011 PS
have not received the final resolution of the DTSC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 12.1pt 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">The soil treatment was suspended at the beginning
of 2011 due to the ineffective results of the process, determined with several studies. Thus alternative, once the permits of the
Mexican authorities were obtained, on November 2011 the Mexicali facility began the process of the lands for disposal in a landfill
located on the State of Nuevo Le&oacute;n, Mexico, after separation from their metal content, which are used as raw material in
the casting process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 12.1pt 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">As consequence of two reports transmitted on a local
TV channel about PS in support to two San Diego Bay environmental groups. The DTSC required on November 22, 2011 to PS a program
for the handling and final disposition of the treated soils, due to the fact that the treatment process are now consider hazardous
waste. PS is now reviewing the different alternatives for the final disposition of those soils.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">Due to the fact that the cleanliness levels have
not yet been defined by the Department and since the characterization of all the property has not yet been finished, the allowance
for the costs for the different remedy options are still subject to considerable uncertainty.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">The Company has prepared an estimate, based on prior
years&rsquo; experience, considering the same processes, volume costs, use of own equipment and personnel and assuming that an
agreement will be reached with the DTSC in respect of defining the cleanliness levels, resulting in the amount that goes from between
Ps. 11,000 and Ps. 23,784 (US$ 0.8 million to US$1.7 million). The Company on such bases created an allowance for this contingency
at December 31, 2011, of Ps. 5,935 (US$ 0.4 million), which is included in other accounts payables in the Consolidated Financial
Statement. We can&acute;t guarantee, that no corrective action are more costly than estimated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt"><B>Community Development Commission, CDC</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 49.65pt">The Community Development Commission of National
City, California CDC, has announced that it intends to develop the area where the plant is located in PS and is prepared to make
a bid for the field of PS, at market price less the cost of remediation environmental and research costs incurred. In this connection,
PS has told the CDC that the land voluntarily will not be sold unless there is another area where you can relocate your business.
The CDC, in accordance with the laws of the State of California, has the authority to expropriate the land on payment of the price
to market value and, if there is no other land available for relocation of the business, you must also PS pay the price to book
value. The CDC did bid for the land to PSI for US$&nbsp;6.9 million, supported with a commercial appraisal, and began the process
of expropriation, which was temporarily suspended by a contract between the parties in November 2006, giving more time to PS to
see if you can complete the process of remediation of land and to propose an attractive alternative to the CDC which will remain
in the area.</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>



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<P STYLE="font: 5.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">(b)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">As is the case with most steel manufacturers in the United States
of America, Republic could incur significant costs related to environmental issues in the future, including those arising from
the activities of environmental compliance activities and remediation stemming from historical waste management practices at the
facilities in Republic. The undiscounted reserve to cover probable environmental liabilities totaling Ps. 43,370, Ps. 38,300 and
Ps. 44,400 (US$&nbsp;3.1 million) was recorded as of December 31, 2011, 2010 and 2009, respectively. The reserve includes incremental
direct costs of remediation efforts and post remediation monitoring costs that are expected to be included after corrective actions
are complete. As of December 31, 2011, the current and non-current portions amounted to Ps. 5,596 and Ps. 37,774, respectively
(US$ 0.4 million and US$ 2.7 million, respectively) of the environmental reserve are included in other accrued expenses and accrued
environmental liabilities, respectively, in the accompanying Consolidated Balance Sheets. The Company is not aware of any material
environmental remediation liabilities or contingent liabilities relating to environmental matters with respect to the Company&acute;s
facilities for which the establishment of an additional reserve would be necessary at this time. To the extent the Company incurs
any such additional future costs, these costs, will most likely be incurred over a number of years. However, future regulatory
action regarding historical waste management practices at the Company&acute;s facilities and future changes in applicable laws
and regulations may require the Company to incur significant costs that may have a material adverse effect on the Company&acute;s
future financial performance.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">(c)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">The Company is involved in a number of lawsuits and claims that
have arisen throughout the normal course of business. The management of the Company and its legal advisors do not expect the final
outcome of these matters to have any significant adverse effects on the Company&rsquo;s financial position and results of operations,
therefore no liability has been recognized.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.2pt 0 40.55pt; text-indent: -17.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">(d)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">The Tax Authority have the right to review, at least, the previous
five years and could determine differences in taxes due, plus its updates, surcharges and fines.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.5pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.65pt 29.05pt 0 28.35pt">At December 31,2011 the company has the following
commitments:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">a)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">Republic leases certain equipment, office space and computer
                                                                                                      equipment under non-cancelable operating leases. The leases expire at various dates through 2017. During the years ended
                                                                                                      December 31, 2011 ,2010 and 2009, rental expense relating to operating leases amounted to US$&nbsp;5.4 million, US$4.8
                                                                                                      million and US$5.9 million, respectively. At December 31, 2011, total future minimum lease payments under non-cancelable
                                                                                                      operating leases are $0.8 million in 2012, $ 0.4 million in 2013, $ 0.3 million in 2014, $0.4 million in 2015, and $ 0.3
                                                                                                      million each in the years 2016 and 2017. There are no obligations after 2017.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 4.65pt 0 40.55pt; text-indent: -17.25pt">&nbsp;</P>



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<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">b)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">On September 27, 2011 Grupo Simec S.A.B de C.V. (Simec) signed
a contract with SMS Concast Ag., (&ldquo;Concast&rdquo;) for the acquisition of the melt shop equipment for the subsidiary GV do
Brasil Industria e Comercio de Aco LTDA with an annual production capacity of 520,000 tons of billet for the production of rebar
and wire with an arc furnace of 65 tons. The amount of the transaction is $15 million of Euros at a fixed exchange rate of 1.3764
dollars per euro. The payments will be done in dollars at the exchange rate agreed in accordance to the contract and the following
payment schedule:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Down payment of 15% of the contract,
fifteen days after the contract signature (Ps. 42,070 to December, 31, 2011) See note 11</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">15% to three months from contract signature,</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">15% to six months from contract signature,</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">15% to eight months from contract signature,</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10% to 10 months from contract signature
and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The remaining 30% trough an irrevocable
letter of credit on behalf of the vendor, valid for a minimum of 18 months. This letter of credit will be required payments of
10% of the contract value, starting with the last mayor shipment of the equipment, at the reception of the equipments and to the
start- up tests.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 48.15pt">The vendor gives a Warranty Bond of the 10% of the contract
for a period of 24 months after the mayor shipment of the equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">c)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">On November 18, 2011 Grupo Simec S.A.B. de C.V. (Simec) signed
a contract with SMS Meer S. P. A. (&ldquo;Meer&rdquo;) for the acquisition of a rolling mill for its brazilian subsidiary with
a production capacity of 400,000 tons of wire and rebar. The cost of the rolling mill will be $19.6 million of Euros at a fixed
exchange rate of 1.3482 dollars per euro. The payments will be done in dollars at the exchange rate agreed in accordance to the
contract and the following payment schedule:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">80% of the contract trough an irrevocable
letter of credit on behalf of Meer, this letter of credit will be valid for 14 months and will be required for payments in accordance
with the shipments done by the vendor.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">20% of the contract price shall be paid
in US dollar, out of an irrevocable, non-transferable documentary letter of Credit and this shall be contractually correct and
operative within 11.5 months from supply contract signature and shall have a minimum validity of 14.5 months and will be payable
in two parts:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-size: 10pt">a)</FONT></TD><TD STYLE="padding-right: 15.9pt"><FONT STYLE="font-size: 10pt">10% of the contract once the cold tests are performed, Meer will
give a Bank warranty or insurance on behalf of Simec for the same amount and will be valid for 8 months after the last mayor shipment.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 15.9pt 0 92.15pt; text-indent: -21.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-size: 10pt">b)</FONT></TD><TD STYLE="padding-right: 15.9pt"><FONT STYLE="font-size: 10pt">10% of the contract after the signing of the final acceptance certificate.
The warranty period of the equipment will be 18 months after the last mayor shipment until the signing of the provisional acceptance
certificate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>21.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Other Business</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">a)</TD><TD STYLE="padding-right: 14.9pt">In February 2008, Republic entered into an agreement with Integrys Energy Services (US Energy)
which enables Republic Steel to receive payments for allowing reduction of electricity demands during identified time periods.
This agreement term is currently on a year-to-year extension as per the original contract, running for a full year term from June
1 through May 31. The Company recognized income from this agreement in June 2011, 2010 and 2009 in the amounts of US$3.9 million,
US$2.3 million and US$&nbsp;3.0 million, respectively. Income was recognized after the Company fulfilled its performance obligations
under the terms of the agreement for the full twelve month period of the annual term. As of December 31, 2011, deferred income
related to the term ending May 31, 2012 was recorded in the amount of US$0.6 million.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">b)</FONT></TD><TD STYLE="padding-right: 22pt"><FONT STYLE="font-size: 10pt">During 2009, the Company was awarded US$ 6.7 million resulting from
a settlement with its predecessor owners relating to pre-acquisition contingency indemnification provisions contained in the 2005
purchase agreement. The full amount of this settlement was received and recognized during 2009 as a component of other operating
expenses, net.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 28.35pt; text-align: right"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">c)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">During
                                                                                                                         2009,
                                                                                                                         the Company
                                                                                                                         agreed
                                                                                                                         to settle
                                                                                                                         a dispute
                                                                                                                         with
                                                                                                                         a vendor
                                                                                                                         of iron
                                                                                                                         ore pellets
                                                                                                                         by paying
                                                                                                                         US$ 9.1
                                                                                                                         million.
                                                                                                                         US$ 4.5
                                                                                                                         million
                                                                                                                         was paid
                                                                                                                         during
                                                                                                                         2009
                                                                                                                         and US$
                                                                                                                         4.6 million
                                                                                                                         was paid
                                                                                                                         in January
                                                                                                                         of 2010.
                                                                                                                         The full
                                                                                                                         amount
                                                                                                                         of this
                                                                                                                         settlement
                                                                                                                         was expensed
                                                                                                                         during
                                                                                                                         2009,
                                                                                                                         US$4.6
                                                                                                                         million
                                                                                                                         of which
                                                                                                                         was accrued
                                                                                                                         at December
                                                                                                                         31, 2009.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt; text-align: right"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">d)</FONT></TD><TD><FONT STYLE="font-size: 10pt">During
                                                                                                                         2009,
                                                                                                                         the Company
                                                                                                                         was required
                                                                                                                         to pay
                                                                                                                         back
                                                                                                                         US$ 2.2
                                                                                                                         million
                                                                                                                         in settlement
                                                                                                                         of what
                                                                                                                         was determined
                                                                                                                         to be
                                                                                                                         &ldquo;preference
                                                                                                                         payments&rdquo;
                                                                                                                         from
                                                                                                                         a customer
                                                                                                                         in bankruptcy.
                                                                                                                         The full
                                                                                                                         amount
                                                                                                                         was expensed
                                                                                                                         and paid
                                                                                                                         during
                                                                                                                         2009.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>22.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Adoption of International Financial Reporting Standards (IFRS)</B></FONT></TD></TR></TABLE>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">The Mexican Securities Commission (CNBV) establish
the requirement to listed companies to disclose their financial information to the public trough the Mexican Stock Exchange (BMV)
to that from 2012 to develop obligatory financial information based on Financial Reporting Standard (IFRS) hereinafter IFRS or
IAS, issued by the International Accounting Standard Board (IASB).</P>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">The Financial Statements to be issued by the Company
for the year ending December 31, 2012 will be its first annual financial statements comply with IFRS. The translation date is January
1, 2012 and therefore, the year ended December 31, 2011 will be the comparative period covered by the standard of adoption IFRS
1, &ldquo;Initial Adoption of International Financial Reporting Standards&rdquo;. According to IFRS 1 the Company will apply the
relevant mandatory exceptions and certain optional exemption to retrospective application of IFRS.</P>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">a)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">Mandatory exceptions - The Company will apply the following mandatory
exceptions regarding the retrospective application of IFRS as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Calculation of Estimates -
Estimates of the date of transition are consistent with the estimates at that date under the MFRS, unless there was evidence of
error in these estimates.</P>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Hedge accounting - will apply
hedge accounting only if the hedging relationship meets the criteria set out in the IFRS transition date.</P>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Non-controlling interest -
will be applied prospectively certain recognition and presentation requirements related to non-controlling, from the date of transition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>



<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 53.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">In addition, the Company believes
that the mandatory exception &ldquo;Disposal and transfer of assets and liabilities&rdquo; will have no effect on its financial statements
as of the date of transition to IFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Optional Exemptions - The
Company has elected the following optional exemptions to retrospective application of IFRS as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Business combinations - the
exemption will apply to business combinations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Deemed Cost - the exemption
will apply cost incurred. Therefore, we chose to use the revalued amount under MFRS to the transition date as the cost incurred
for the item of property, plant and equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Employee benefits - exemption
will apply to benefits to employees. Therefore recognize all cumulative actuarial gains and losses at the transition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Cumulative differences for
the effect of conversion - the exemption will apply cumulative differences for the translation effect in foreign subsidiaries.
Therefore, it is set to zero the conversion effect at the time of transition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Borrowing Costs - The Company
will apply the transitional provisions of IAS 23, Borrowing Costs. Therefore, the Company designated the transition date as the
starting date for capitalization of borrowing costs relating to qualifying assets, not retroactively change the capitalization
made pursuant to MFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt">b)</FONT></TD><TD STYLE="padding-right: 29.05pt"><FONT STYLE="font-size: 10pt">Main Differences - The following summarizes the main differences
have been identified in the transition from MFRS to IFRS at the date of these consolidated financial statements and an estimate
of significant impacts:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Effects of inflation - Under
IFRS, the inflationary effects are recognized in the financial statements when the economy of the currency used by the Company
qualifies as hyperinflation. The Mexican economy ceased to be hyperinflationary as from 1999 and, consequently, inflationary effects
that were recognized by the Company until December 31, 2007 under MFRS will be reversed, an increase to retained earnings of approximately
Ps. 1,364,782 to date transition, which correspond primarily to the effects of inflation recognized in contributed capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Components - According to
IFRS, the Company will determine the significant components of property, plant and equipment, and consequently readjust their useful
lives and its corresponding effect on the accumulated depreciation from the date of transition, which represents a decrease to
retained earnings of approximately Ps. 164.906 from the date of transition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Employee Benefits - Under
IFRS, provisions for severance labor recognized until the Company has a demonstrable commitment to end the relationship with the
employee or has made an offer encouraging voluntary redundancy, therefore, will remove the liability recognized under MFRS than
Ps. 10,750 to the transition date. Additionally, provisions for retirement is recalculated to recognize in the corresponding period
the cost of past service, therefore, will recognize an additional liability of Ps.&nbsp;24,550.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Deferred taxes - Under IFRS,
deferred taxes will be recalculated with the adjusted book values of assets and liabilities under IFRS, which will result in an
increase to retained earnings of approximately Ps. 79,582 to the transition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Other differences in presentation
and disclosures in the financial statements - Generally, the disclosure requirements of IFRS are broader than those of MFRS, which
can result in increased disclosures about accounting policies, significant judgments and estimates, financial instruments and management
risks, among others. In addition, there may be differences in presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">Stockholders&rsquo; equity
changes previously described will modify stockholders&rsquo; equity and retained earnings as of the date of transition as shown
below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="5" STYLE="padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Impact In:</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Equity</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Retained
    earnings</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 63%; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Employee benefits (actuarial gains and losses)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; color: #333333; text-align: right"><FONT STYLE="font-size: 10pt">(3,520)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,520)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Translations effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">406,513</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Inflation effects on stockholders&rsquo; accounts</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,364,782</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Components and parts</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; color: #333333; text-align: right"><FONT STYLE="font-size: 10pt">(164,906)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; color: #333333; text-align: right"><FONT STYLE="font-size: 10pt">(164,906)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Employee benefits (providing compensation)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">10,750</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">10,750</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; color: #333333"><FONT STYLE="font-size: 10pt">Employee benefits (past service cost)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(24,550)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(24,550)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; color: #333333"><FONT STYLE="font-size: 10pt">Deferred taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">79,582</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">79,582</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt; color: #333333"><FONT STYLE="font-size: 10pt">Total adjustment</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: 0; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">(102,644)</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: 3; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,668,651</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">The information presented
in this Note has been prepared in accordance with the standards and interpretations issued and outstanding or issued and early
adopted the date of preparation of these consolidated financial statements. The standards and interpretations that are applicable
to December 31, 2012, including those that will be applicable on an optional, are not known with certainty at the time of preparation
of consolidated financial statements at December 31, 2011 and 2010 attachments. Additionally, the accounting policies selected
by the Company may be modified as a result of changes in the economic or industry trends that are observable after the issuance
of these consolidated financial statements. The information presented in this Note does not intend to comply with IFRS, as only
one set of financial statements comprising the statements of financial position, comprehensive income, changes in stockholders&rsquo;
equity and cash flows, together with comparative information and explanatory notes can provide a fair presentation of the Company&rsquo;s
financial position, results of operations, changes in stockholders&rsquo; and cash flows under IFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0 29.05pt 0 49.65pt; text-indent: 0.6pt; color: #333333">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>23.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>New pronouncements</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt; text-indent: 0.6pt">They have issued amendments
to IFRS and IAS by the IASB, which were enacted but not yet entered into force:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt; text-indent: 0.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt; text-indent: 0.6pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 32%">Amendments to IFRS 7</TD>
    <TD STYLE="width: 62%">Disclosure - Transfers of financial assets</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IFRS 9 (amended 2010)</TD>
    <TD>Financial Instruments</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IFRS 10</TD>
    <TD>Consolidated Financial Statements</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IFRS 11</TD>
    <TD>Joint Arrangements</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IFRS 12</TD>
    <TD>Disclosure of investments in other entities</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IFRS 13</TD>
    <TD>Fair value measurements</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Amendments to IAS 1</TD>
    <TD>Presentation of other comprehensive income items</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Amendments to IAS 12</TD>
    <TD>&nbsp;Deferred tax - recovery of underlying assets</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IAS 27 (revised 2011)</TD>
    <TD>Financial Statements</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>IAS 28 (revised 2011)</TD>
    <TD>Investments in associates</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt; text-indent: 0.6pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt; text-indent: 0.6pt">At the date of this report,
the Company believes that adoption of these accounting pronouncements will not represent a significant effect on financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>24.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Issuance of Financial Statements</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">The issuance of the financial statements and accompanying
notes that are included, were authorized on April 24, 2011 by Mr. Luis Garcia Limon and Adolfo Luna Luna, Chief Executive Officer
and Chief Financial Officer, respectively, which must be also approved by the Company&rsquo;s Board of Directors, Audit Committee
and Stockholders at their next meetings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1.7pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 6pt"></TD><TD STYLE="width: 22.35pt"><FONT STYLE="font-size: 10pt"><B>25.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Differences between Mexican financial reporting standards and United States accounting principles:</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The Company&rsquo;s consolidated financial statements
are prepared in accordance with Mexican financial reporting standards (Mexican</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">GAAP), which differ in certain significant respects
from United States generally accepted accounting principles (US GAAP).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">As described in Note 4 (a), effective January 1,
2008, the Company ceased to recognize the effects of inflation on its financial statements as required by MFRS B-10. However, as
required by such new standard, the financial statement amounts that were previously reported remained unchanged, and the inflation
adjustments previously recognized have been maintained in their corresponding caption. This new standard requires that the re-expressed
amounts of non-monetary assets as reported at December 31, 2007 become the carrying amounts for those assets effective January
1, 2008. The carrying amounts will also affect net income in future periods. For example, depreciation expense after the adoption
of MFRS B-10 will be based on carrying amounts of fixed assets that include inflation adjustments recorded prior to the adoption
of MFRS B-10.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 29.05pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">The Mexican and U.S. GAAP amounts included in this
Note, as they relate to the years ended December 31, 2011 and 2010, are presented in the carrying amounts as required by MFRS B-10,
and the effects of inflation that were recorded prior to 2008 have not been included in the reconciliations to U.S. GAAP.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.9pt 0 28.35pt">Other significant differences between Mexican GAAP
and US GAAP and the effects on consolidated net income and consolidated stockholders&rsquo; equity are presented below, in thousands
of Mexican pesos as of December 31, 2011, with an explanation of the adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.75pt 0 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt"><B>Reconciliation of net income (loss):</B></P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Net income as reported under Mexican GAAP</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,952,231</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">668,954</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(1,221,194)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Depreciation on restatement of machinery and equipment</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(13,393)</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(13,393)</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(5,607)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">1,579</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">658</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">(38,854)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Amortization of gain from monetary position
    and exchange (loss)<BR>
 &nbsp;&nbsp;&nbsp;capitalized under Mexican GAAP</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">7,755</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">7,755</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">7,755</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Implied goodwill impairment adjustment
    difference</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(102,000)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">102,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Bargain purchase gain, net of tax</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">81,424</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Amortization of intangible assets proceeding
    from assets acquired <BR>
&nbsp;&nbsp;&nbsp;by Republic</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(2,618)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">74,747</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(106,980)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">65,294</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6"><FONT STYLE="font-size: 10pt">Net income (loss) under U.S. GAAP</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">3,026,978</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">561,974</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 0; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">(1,155,900)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%"><FONT STYLE="font-size: 10pt">Allocation of net income (loss) under U.S. GAAP:</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Non-controlling interest on Mexican GAAP</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">89,804</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(267,547)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(877,449)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">U.S. GAAP adjustment on non- controlling interest</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">39,229</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Non-controlling interest under U.S. GAAP</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">129,033</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(267,547)</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(877,449)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6"><FONT STYLE="font-size: 10pt">Controlling interest under U.S. GAAP</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">2,897,945</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">829,521</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">(278,451)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">3,026,978</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">561,974</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">(1,155,900)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6"><FONT STYLE="font-size: 10pt">Weighted average shares outstanding</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">497,709,214</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">497,709,214</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">497,709,214</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6"><FONT STYLE="font-size: 10pt">Net earnings (losses) per share (pesos) &ndash; controlling
    interest</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">5.82</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">1.67</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-top: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 0; text-align: right; padding-top: 6"><FONT STYLE="font-size: 10pt">(0.56)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.85pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 14.2pt 0 28.35pt">In 2010 the Company recorded an impairment
loss of Ps. 102,000 under U.S. GAAP. Under Mexican GAAP, the goodwill impairment is recorded in other expenses, whereas for U.S.
GAAP, goodwill impairment is recorded as an operating expense. In 2010 and 2009, the Company recorded expense from employee profit
sharing of Ps. 95 and Ps. 7,261, respectively, recorded as other expenses that were reclassified to operating expenses for U.S.
GAAP purposes. In 2011 the Company didn&acute;t record profit sharing. The Company record Ps.&nbsp;7,000, under other income which
was reclassified under operating income for U.S. GAAP purposes. The Company recorded in 2010 a cancellation of a patent acquired
of $117,457 relating to the acquisition of Lipa Capital, LLC in other expenses (see Note 3-m). This amount was reclassified to
operating expenses for U.S. GAAP purposes.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 28.35pt"><B>Reconciliation of stockholder&rsquo;s equity:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 55%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Total stockholders&rsquo; equity reported
    under Mexican GAAP</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">24,268,823</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">20,618,425</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">20,078,552</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Bargain purchase gain, net of tax</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">81,424</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Restatement of machinery and Equipment</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">147,327</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">160,720</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">174,113</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">502</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(1,077)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(2,655)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Amortization of intangible assets</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(2,618)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Adjustment for implied goodwill</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">102,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Gain from monetary
    position and exchange loss capitalized, net</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(149,121)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(156,876)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(163,711)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Total US GAAP adjustment</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">77,514</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">2,767</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">109,747</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Total stockholder&rsquo;s equity under
    US GAAP</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">24,346,337</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">20,621,192</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">20,188,299</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 28.35pt">A summary of changes in stockholders&rsquo; equity,
after the US GAAP adjustments described above, is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Capital
        Stock</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">and
        Paid-in Capital</FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Retained</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Earnings</FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Fair
        Value Derivative</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Financial
        Instruments</FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Translation</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">effect
        of</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">foreign</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">subsidiaries</FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Cumulative
        Restatement</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Effect</FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Total</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Controlling
        Stockholders&rsquo;</FONT></P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Equity</FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">Non-
    Controlling interest</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Total</FONT></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">Stockholders&rsquo;
        <BR>
Equity</FONT></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 22%; font-family: Times New Roman, Times, Serif; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Balance
    at December 31, 2008</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">7,771,687</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">9,106,144</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; width: 8%"><FONT STYLE="font-size: 7pt">(270,868)</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">595,165</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">981,302</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">18,183,430</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">3,177,545</FONT></TD>
    <TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">21,360,975</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Net
    comprehensive loss</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(278,451)</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">119,141</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(79,507)</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(238,817)</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(956,259)</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(1,195,076)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Net
    effect at Adopting MFRS C-8</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">22,400</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">22,400</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">22,400</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Balances
    at December 31, 2009</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">7,771,687</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">8,850,093</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(151,727)</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">515,658</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">981,302</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">17,967,013</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">2,221,286</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">20,188,299</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Net Comprehensive income (loss)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">829,521</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">88,378</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">(109,145)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">808,754</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(375,861)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">432,893</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Balances at December 31, 2010</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">7,771,687</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">9,679,614</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(63,349)</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">406,513</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">981,302</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">18,775,767</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">1,845,425</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">20,621,192</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Net Comprehensive income</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">2,897,945</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">37,904</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">418,292</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">3,354,141</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">371,004</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">3,725,145</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 7pt">Balances at December 31, 2011</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right"><FONT STYLE="font-size: 7pt">7,771,687</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">12,577,559</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 7pt">(25,445)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">824,805</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right"><FONT STYLE="font-size: 7pt">981,302</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">22,129,908</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">2,216,429</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 7pt">24,346,337</FONT></TD></TR>
</TABLE>
<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 28.35pt">The cumulative difference between the amounts included
under Capital Stock and Paid-in Capital for US GAAP and Capital Stock and Stock Premiums for Mexican GAAP arise from the following
items:</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Issuance of capital stock</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.25in 0 28.35pt">During 1993 and 1994 the Company recorded Ps. 99,214
and Ps. 31,794, respectively, corresponding to expenses related to the issuance of shares in a simultaneous public offering in
the United States and Mexico as a reduction of the proceeds from the issuance of capital stock. In 1993 and 1994, these expenses
were deducted for tax purposes resulting in a tax benefit of Ps. 34,478 and Ps. 10,812. These tax benefits were included in the
statement of operations for Mexican GAAP purposes. For U.S. GAAP purposes these items were shown as a reduction of cost of issuance
of the shares, thereby increasing the net proceeds from the offering.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 22pt 0 28.35pt"><B>Maritime operations and amortization of negative
goodwill</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.05pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">In 1993, Grupo Simec disposed of its maritime operations
by spinning- off the two entities acquired in 1992 to Grupo Sidek (former parent company of Grupo Simec) and transferring its remaining
maritime subsidiary to Grupo Sidek for its approximate book value.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">The operations sold had tax loss carry forward of
approximately Ps. 211,193 which were related to operations prior to the date the entities were acquired by the Company. During
1994, Ps. 4,936 of these tax loss carry forwards were realized (resulting in a tax benefit of Ps. 1,701).</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.05pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">For U.S. GAAP purposes, the retained tax benefit
of Ps. 1,701 realized in 1994, had been reflected as an increase to the corresponding paid-in capital rather than in net earnings
as done for Mexican GAAP purposes.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt"><B>Gain on extinguishment</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">On February 7, 2001, the Company&rsquo;s Board of
Directors approved the issuance of 492,852,025 shares of Series &ldquo;B&rdquo; variable capital stock in exchange for the extinguishment
of debt amounting to U.S.$ 110,257,012. Under Mexican GAAP, the increase in stockholders&rsquo; equity resulting from the conversion
or extinguishment of debt is equal to the carrying amount of the extinguished debt. The Company assigned a value of U.S.$ 110,257,012
to the Series &ldquo;B&rdquo; capital stock and, therefore, no difference existed between the equity interest granted and the carrying
amount of the debt extinguished. Under U.S. GAAP, the difference between the fair value of equity interest granted and the carrying
amount of extinguished debt is recognized as a gain or loss on extinguishment of debt in the statement of operations. For U.S.
GAAP purposes, the fair value of the Series &ldquo;B&rdquo; capital stock was determined by reference to the quoted market price
on March 29, 2001, the date the transaction was effected, and the difference between the fair value of the Series &ldquo;B&rdquo;
capital stock and the carrying amount of the extinguished indebtedness was recognized as a gain in the statement of operations.
The related restated effect as of December 31, 2010 is Ps. 626,203.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt"><B>Reconciliation of Net Income (loss) and Stockholders&rsquo;
Equity:</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt; text-align: justify">The Company&rsquo;s consolidated
financial statements are prepared in accordance with Mexican GAAP, which differ in certain significant respects from US GAAP. The
explanations of the related adjustments included in the Reconciliation of the Net Income (loss) and the Reconciliation of stockholders&rsquo;
equity are explained below:</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt"><B>Restatement of property, machinery and equipment
</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 1pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">As explained in note 4(h), in accordance with Mexican
GAAP, imported machinery and equipment has been restated until 2007 by applying devaluation and inflation factors of the country
of origin.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.05pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">Under US GAAP, until December 31, 2007 the restatement
of all machinery and equipment, both domestic and imported, has been done in constant units of the reporting currency, the Mexican
peso, using the inflation rate of Mexico.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">Accordingly, a reconciling item for the difference
in methodologies of restating imported machinery and equipment is included in the reconciliation of net income (loss) and stockholders&rsquo;
equity.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.45pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 28.35pt"><B>Deferred income taxes and employee profit sharing</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">As explained in Note 4(u) under Mexican GAAP, the
Company accounts for deferred income tax following the guidelines of MFRS D-4 &ldquo;income taxes&rdquo;. The main differences
between ASC 740 Income taxes (formerly SFAS No. 109) and MFRS D-4, as they relate to the Company, which are included as reconciling
items between Mexican and US GAAP are:</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 14.9pt 0 28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 14.9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the income tax effect of gain from monetary
position and exchange loss capitalized that is recorded as an adjustment to stockholders&rsquo; equity for Mexican GAAP purposes
until December 31, 2007,</FONT></TD></TR></TABLE>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.05pt 14.9pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 14.9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the income tax effect until December 31,
2008 of capitalized pre-operating expenses. With adoption of new MFRS C-8, in 2009 these capitalized expenses were cancelled to
retained earnings. For US GAAP purposes, these are expensed when incurred,</FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 14.9pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: xx-small Wingdings">z</FONT></TD><TD STYLE="padding-right: 14.9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the effect on income tax of the difference
between the indexed cost and the restatement through use of specific indexation factors of fixed assets which is recorded as an
adjustment to stockholders&rsquo; equity for Mexican GAAP, and,</FONT></TD></TR></TABLE>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 14.9pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">In addition, the Company is required to pay employee
profit sharing in accordance with Mexican labor law. Deferred employee profit sharing under US GAAP has been determined following
the guidelines of ASC 740 Income Taxes (formerly SFAS No. 109). Until December 31, 2007, under Mexican GAAP, the deferred portion
of employee profit sharing is determined on temporary non-recurring differences with a known turnaround time. As mentioned in Note
4(p), beginning in 2008, the Company recognizes deferred employee profit sharing under the new MFRS D-3 &ldquo;Employee benefits&rdquo;
for Mexican GAAP. There are no significant differences between ASC 740 Income Taxes (formerly SFAS No. 109) and MFRS D-3.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 14.9pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">Employee statutory profit-sharing expense is classified
as an operating expense under US GAAP, and as other (expenses) income, net under MFRS.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">The effects of temporary differences giving rise
to significant portions of the deferred assets and liabilities for Income Tax (IT) at December 31, 2011 and 2010, under US GAAP
are present below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 63%; padding-left: 0"><FONT STYLE="font-size: 10pt">Deferred tax assets:</FONT></TD>
    <TD STYLE="width: 2%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Allowance for doubtful accounts</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">63,826</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">59,154</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Accrued expenses</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">143,404</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">160,787</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Advances from customers</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">643</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">25,907</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Tax losses carry forwards</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,893,413</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">851,269</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Republic tax credits</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">26,274</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">133,481</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Recoverable asset tax</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">106,869</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">99,610</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Employee profit sharing provision</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">250</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">39</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Derivative financial instruments</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">13,429</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">27,612</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0"><FONT STYLE="font-size: 10pt">Deferred tax assets</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4,248,108</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,357,859</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Less valuation allowance</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">(3,650,815)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">(747,113)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Deferred tax assets, net (includes  Ps. 528,445 in USA)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">597,293</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">610,746</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; color: #333333; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0"><FONT STYLE="font-size: 10pt">Deferred tax liabilities:</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Inventories, net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">843,836</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">663,095</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,069,339</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,874,676</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Intangible assets in acquisition of Grupo San</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">510,214</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">613,868</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Deferred business flat tax</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">231,366</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">50,901</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Prepaid expenses</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,888</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,133</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Intangible assets in acquisition of Solon(bargain purchase
    gain)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">52,212</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Others</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">7,033</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">138,751</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0"><FONT STYLE="font-size: 10pt">Total deferred liabilities (includes  Ps. 819,641 in
    USA)</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,720,888</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,347,424</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: bottom; padding-left: 18"><FONT STYLE="font-size: 10pt">Deferred tax liabilities,
    net</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,123,595</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,736,678</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">For the years ended December 31, 2011 and 2010,
the classification of deferred income tax under U.S. GAAP is as follows:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 63%; padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Deferred tax assets:</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 6; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Current portion of deferred income tax asset</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; color: #333333; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 6; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Non-current portion of deferred income tax asset</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font-size: 10pt">Deferred tax liabilities:</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 6; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Current portion of deferred income tax liabilities</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">610,181</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">534,519</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 6; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Long-term deferred income tax liability</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">2,513,414</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right; padding-bottom: 6"><FONT STYLE="font-size: 10pt">2,202,159</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">The deferred income taxes of Ps. 2,069,339 and
Ps. 1,874,676 result from differences between the financial reporting and tax bases of property, plant and equipment at December
31, 2011 and 2010, respectively. Beginning in 1997 the restatement of property, plant and equipment and the effects thereof on
the statement of operations are determined by using factors derived from the NCPI or, in the case of imported machinery and equipment,
by applying devaluation and inflation factors of the country of origin. Until 1996, for financial reporting purposes, property,
plant and equipment were stated at net replacement cost based upon annual independent appraisals and depreciation was provided
by using the straight-line method over the estimated remaining useful lives of the assets. For income tax reporting purposes, property,
plant, and equipment and depreciation are computed by a method which considers the NCPI.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 14.9pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Pre-operating expenses </B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 10.2pt 0 28.35pt">For Mexican GAAP purposes, the Company capitalized
pre-operating expenses related to the production facilities at Mexicali, as well as costs and expenses incurred in the manufacturing
and design of new products. In 2009, according to the adoption of the new MFRS C-8 the preoperative expenses were cancelled to
retained earnings. For US GAAP purposes, these items are expensed when incurred.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Financial expense capitalized </B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 18.45pt 0 28.35pt">Under Mexican GAAP, financial expense capitalized
during the period required to bring property, plant and equipment into the condition required for their intended use, includes
interest, exchange losses and gains from monetary position. Under U.S. GAAP when financing is in Mexican pesos, the monetary gain
is included in this computation; when financing is denominated in U.S. dollars, only the interest is capitalized and exchange losses
and monetary position are not included.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Disclosure about Fair Value of Financial Instruments</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">In accordance with ASC 825 Financial Instruments (formerly
SFAS No. 107 Disclosures about Fair Value of Financial Instruments), under U.S. GAAP it is necessary to provide information about
the fair value of certain financial instruments for which it is practicable to estimate that value. The carrying amounts of cash
and cash equivalents, accounts receivable and accounts payable and short-term debt approximate fair value due to the short term
maturity of these instruments.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Pension and other retirement benefits</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The Company accrues for seniority premiums and termination
payments based on actuarial computations as described in note 4(p).</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.85pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17.3pt 0 28.35pt">ASC 715 Compensation &ndash; Retirement Benefits
(formerly SFAS No. 158 Employers&rsquo; Accounting for Defined Benefit Pension and Other Postretirement Plans, SFAS No. 87 Employer&rsquo;s
Accounting for Pensions, SFAS No. 88 Employer&rsquo;s Accounting for Settlements and Curtailments of Defined Benefit Pension Plan
and for Termination Benefits, SFAS No. 106 Employer&rsquo;s Accounting for Post-retirement Benefits Other than Pensions and SFAS
No. 132(R) Employers&acute; Disclosures about Pensions and Other Postretirement Benefits), requires the employer to recognize the
overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability
in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through
comprehensive (loss) income. ASC 715 also requires accrual of post-retirement benefits other than pensions during the employment
period. ASC 715 is also applied for purposes of determining seniority premium costs. Adjustments to US GAAP for these benefits
were not individually or in the aggregate significant for any period.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 10.9pt 0 28.35pt">The additional disclosures for U.S. GAAP related
to Pension and other retirement benefits are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: #ACA89A 1.5pt solid; border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 63%; padding-right: 5.4pt; padding-left: 0"><FONT STYLE="font-size: 10pt">Change in projected benefit obligation</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Projected benefit obligation at beginning of year</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">75,325</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">77,688</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Service cost</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,814</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,554</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-left: 6"><FONT STYLE="font-size: 10pt">Financial cost</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,400</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,962</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-left: 6"><FONT STYLE="font-size: 10pt">Actuarial losses (gains)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">782</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">(794)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 6"><FONT STYLE="font-size: 10pt">Benefits paid</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; vertical-align: bottom; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">(7,428)</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 1.5pt solid; vertical-align: bottom; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">(14,085)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0"><FONT STYLE="font-size: 10pt">Projected benefit obligation at end of year</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">79,893</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #BFBFBF 2.25pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">75,325</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 10.9pt 0 28.35pt">In 2009 the Company terminated the pension
plan from the Grupo San acquisition and the total amount of this fund was liquidated and paid to employees during the first and
second quarter of 2009.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>No Right of Redemption</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The Mexican Securities Market Law and our bylaws provide
that our shareholders do not have redemption rights for their shares.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Goodwill and intangibles</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 19.55pt 0 28.35pt">In assessing the recoverability of the goodwill
and other intangibles the Company must make assumptions regarding estimated future cash flows and other factors to determine the
fair value of the respective assets. The Company performs an annual review in the fourth quarter of each year, or more frequently
if indicators of potential impairment exist, to determine if the carrying value of recorded goodwill is impaired. The impairment
review process compares the fair value of the reporting unit in which goodwill resides to its carrying value. The Company estimates
the reporting unit&rsquo;s fair value based on a discounted future cash flow approach that requires estimating income from operations
based on historical results and discount rates based on a weighted average cost of capital from a market participant perspective.
Under U.S. GAAP, if the carrying amount of the reporting units exceeds its related fair value, the Company should apply a &ldquo;second
step&rdquo; process by means of which the fair value of such reporting unit should be allocated to the fair value of its net assets
in order to determine the reporting unit&rsquo;s &ldquo;implied&rdquo; goodwill. The resulting impairment loss under US GAAP is
the difference between the carrying amount of the related goodwill as of the valuation date and the implied goodwill amount. As
of December 31, 2009, the implied goodwill under the second step process was Ps. 1,916 million. Additionally, the Company reconciles
the aggregate fair value of the reporting units to its market capitalization. The Company&rsquo;s market capitalization as of December
31, 2009 indicates an implied control premium of approximately 25% percent. This implied control premium is consistent with recent
observed control premiums. Assumptions used in the analysis considered the current market conditions in developing short and long-term
growth expectations. For U.S. GAAP purposes, in 2010, there was an adjustment for goodwill amounting Ps.102 million, in 2011 there
are no additional impairments. Other intangible assets are mainly comprised by trademarks, customer listings and non-competition
agreements. When impairment indicators exists, or at least annually for indefinite live intangibles, the Company determines its
projected revenue streams over the estimated useful life of the asset. In order to obtain undiscounted and discounted cash flows
attributable to each intangible asset, such revenues are adjusted for operating expenses, changes in working capital and other
expenditures as applicable, and discounted to net present value using the risk adjusted discount rates of return. As of December
31,2011, 2010 and 2009 there was no impairment charge related to other intangible assets.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.05pt 7.65pt 0 28.35pt">As a result of the downturn in the construction
industry in Mexico during 2009 and the negative impact this downturn had in the Company&rsquo;s operations mainly at the San Luis
facilities, in which goodwill resides, the Company adjusted the key assumptions used in the valuation model. As of December 31,
2009 the main key assumptions used in the valuation models of San Luis reporting unit are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><FONT STYLE="font: xx-small Wingdings">z</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT><FONT STYLE="font-size: 10pt">Discount rate: 18.1%</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 15.65pt 0 28.35pt"><FONT STYLE="font: xx-small Wingdings">z</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT><FONT STYLE="font-size: 10pt">Sales: the Company estimates sales will start a recovery in the years 2010, 2011 and 2012
to basically reach its 2008 sales level at the year 2012. After the year 2012 no sales increases in volume terms are considered
in the valuation model.</FONT></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 6.75pt 0 28.35pt">The assumptions included in the valuation model
for 2010 include an increase in sales in 2011 mainly attributable to the increase in the volume by the semi-finish products &ldquo;
billet&rdquo; to a third party and the forecast of increase in sales price for the next years. The company forecast an increase
of 4% for 2012, 2% for 2013 and the useful remaining live of the assets we keep the volume and sales prices. The Discount rate
used in 2010 for the valuation was 11.8%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 6.75pt 0 28.35pt">The assumptions included in the valuation model
for 2011 include an increase in sales in 2012 mainly attributable to the increase in the volume by the mesh products, and the forecast
of increase in sales price for the next years. The company forecast an increase of 10% for 2012 and 1.7% for 2013 and the useful
remaining live of the assets we keep the volume and sales prices. The Discount rate used in 2011 for the valuation was 10.9%.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 1pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 10.2pt 0 28.35pt">If these estimates or their related assumptions
for prices and demand change in the future, we may be required to record additional impairment charges for these assets.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Long-lived assets</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.5pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The Company reviews the recoverability of our long-lived
assets as required by ASC 360 Property, Plant and Equipment (formerly SFAS No. 144 Accounting for the Impairment or Disposal of
Long &ndash; Lived Assets) and must make assumptions regarding estimated future cash flows and other factors to determine the fair
value of the respective assets. As of December 31, 2011, 2010 and 2009 there was no impairment charges recorded for these type
of assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment
charges not previously recorded.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 0 0 28.35pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 12pt 28.35pt; text-align: justify"><B>Business Combination</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 12pt 28.35pt; text-align: justify">In February 2011, the
Company, through two of its wholly owned subsidiaries (Solon Wire Processing LLC, formerly REP Acquisition LLC, and the newly formed
Republic Memphis LLC) acquired certain land, plants, machinery and equipment from BCS Industries LLC and affiliates (Bluff City
Steel) for cash of $2.5 million and the essential forgiveness of $6.0 million of net receivables due from Bluff City Steel to the
Company. For accounting of Republic, this acquisition was deemed to be a business combination under Accounting Standards Codification
(ASC) 805, <I>Business Combinations</I>. This accounting standard require that when the fair value of the net assets acquired exceeds
the purchase price, resulting in a bargain purchase gain, the acquirer must reassess the reasonableness of the values assigned
to all of the assets acquired, liabilities assumed and consideration transferred. The Company has performed such a reassessment
and has concluded that the values assigned for the acquisition are reasonable. Consequently, for USGAAP purposes a bargain purchase
gain must be recorded. This gain amounted to Ps. 81,424 (US$5.8 million). The Company determined to be reasonable because (a) the
seller was financially distressed, (b) the business was not widely marketed for sale, (c) the machinery and equipment are specialized,
and (d) an independent business valuation indicated that its fair value was in excess of the purchase price.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 0 28.35pt; text-align: justify">The methodology in allocating
the total consideration to the acquired assets of Bluff City Steel is described as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 0 28.35pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 16.95pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">An experienced,
qualified, independent third party assisted in the valuation of the property, plant and equipment using the cost and market approaches
based in part on assumptions provided by management;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 16.95pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">An experienced,
qualified, independent third party assisted in the valuation of intangible assets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 0 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 6pt 28.35pt; text-align: justify">Immediately after the acquisition,
the Company leased back one of the acquired facilities to Bluff City Steel for a three year term.&nbsp; Due primarily to the bargain
purchase option offered in that lease by the Company to Bluff City Steel, the Company recorded the lease as a sales-type lease
whereby it allocated $1.3 million to Lease receivable representing the present value of the expected minimum lease payments.&nbsp;However,
shortly after the acquisition, Bluff City Steel defaulted on the lease and the Company terminated the lease.&nbsp; Accordingly,
using the remaining Lease receivable as its estimated value, the Company reclassified the asset into Property, plant and equipment
in the above table, leaving the Lease Receivable as the amount actually collected prior to the default and termination.&nbsp; The
Company is assessing the future use, lease or sale of the facility. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 0 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 6pt 28.35pt; text-align: justify">The final purchase price
allocation was as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="5" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Thousands
    of</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Dollars</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: -5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Pesos</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 74%"><FONT STYLE="font-size: 10pt">Total Consideration</FONT></TD>
    <TD STYLE="width: 4%; border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">8,503</FONT></TD>
    <TD STYLE="width: 3%; border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">118,960</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 30pt"><FONT STYLE="font-size: 10pt">Recognized fair value amounts of identifiable assets, acquired
    and liabilities assumed:</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Lease Receivable</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">289</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">4,042</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Property, plant and Equipment,</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">8,249</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">115,407</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Customer List intangible,</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">9,218</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">128,964</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Other identifiable intangibles</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">299</FONT></TD>
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">4,183</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Deferred Tax Liability</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(3,732)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 0; text-align: right"><FONT STYLE="font-size: 10pt">(52,212)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">Net Assets acquired</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">14,323</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">200,384</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Bargain purchase gain under USGAAP</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">5,820</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: -5.4pt; padding-bottom: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3; text-align: right"><FONT STYLE="font-size: 10pt">81,424</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 16.95pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt; text-align: justify">In accordance with MFRS B-7
&ldquo;Business acquisitions&rdquo;, in the unusual case where the amount paid in a business acquisition is less than the value
assigned to identifiable assets and liabilities assumed of the acquired business, assets value must be reviewed. If the effect
persists, must be considered the net assets of the acquired business are valued at more than its value. In this case, must be adjusted
the value of the assets at the amount paid in the transaction, due to this price is considered as the fair value of the transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt; text-align: justify">The adjustment to the values
in such situation must be applied reducing the value of certain assets of the acquired business to exhaustion, adjusted in the
following order:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a)</FONT></TD><TD STYLE="text-align: justify; padding-right: 17pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
                                                                                                      values of intangible assets,
                                                                                                      starting with those who
                                                                                                      are being recognized in
                                                                                                      the acquisition process.
                                                                                                      Subsequently, must be assigned
                                                                                                      to other intangible assets
                                                                                                      acquired that previously
                                                                                                      were recognized in the accounting
                                                                                                      of the company acquired.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 46.35pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">b)</FONT></TD><TD STYLE="text-align: justify; padding-right: 17pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
                                                                                                      value of non-monetary assets
                                                                                                      long-term tangible, such
                                                                                                      as property, plant and equipment,
                                                                                                      applying the pro rata adjustment
                                                                                                      to the assigned values,
                                                                                                      except for available for
                                                                                                      sale, and </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">c)</FONT></TD><TD STYLE="text-align: justify; padding-right: 17pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
                                                                                                      value of other non-monetary
                                                                                                      assets in the long term,
                                                                                                      such as permanent investments.
                                                                                                      </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt">For Mexican GAAP, the intangible assets recognized
by Republic corresponding to the customer list amounting to Ps. 128,964 and the other identifiable intangibles amounting to Ps.
4,183 were reduce to zero, and was reduce the property, plant and equipment in Ps. 489, including its corresponding deferred tax
of Ps. 52,212.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 17pt 0 28.35pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 8pt"><B>Statement of cash flows</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8pt">The following presents a statement of cash flows under U.S.
GAAP:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center; padding-right: 3"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center; padding-right: 3"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center; padding-right: 3"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%; padding-top: 4.05pt; padding-right: 3"><FONT STYLE="font-size: 10pt">Cash Flows From Operating Activities:</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt"><B>Net Income (loss) under U.S. GAAP</B></FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">3,026,978</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">561,974</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(1,155,900)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">Impairment loss on intangible assets</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">219,457</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,266,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">Unrealized foreign exchange (gain) loss</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(664,023)</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">117,453</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Depreciation and Amortization</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,009,354</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,103,846</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,045,734</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">195,095</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(47,330)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(1,384,556)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Trade receivable, net</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(424,197)</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(451,876)</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">760,413</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Other accounts receivable and prepaid expenses</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">358,095</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">591,118</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(696,584)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">Inventories</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">15,095</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(176,173)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,103,460</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Accounts payable and accrued expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(599,404)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">425,029</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(1,832,455)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Other long-term liabilities</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">580</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">53,578</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Allowance for inventories</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">118,705</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Gain on Bargain Purchase</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: top; text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(81,424)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: top; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; vertical-align: bottom; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><P STYLE="font: xx-small Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Funds
        provided by operating activities</B></FONT></P></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,954,274</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,344,078</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,159,690</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">Cash Flows From Investing Activities:</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Acquisition of property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(432,000)</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(496,361)</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(263,207)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">Acquisition of subsidiary</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(187,433)</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">(Increase) decrease in other non-current Assets</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(34,200)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(8,794)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">6,932</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><P STYLE="font: xx-small Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Funds used by investing
        activities</B></FONT></P></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(466,200)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(692,588)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(256,275)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">Cash Flows From Financing Activities:</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">Financial debt repayment</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">2,410</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(7,452)</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(11,483)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3"><FONT STYLE="font-size: 10pt">Related party payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">74,963</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">323,720</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">1,189,850</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3"><FONT STYLE="font-size: 10pt">Related party repayment</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(51,225)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(442,688)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; vertical-align: bottom; padding-right: 3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0"><FONT STYLE="font-size: 10pt">(709,219)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.7pt 3 6 6; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Funds (used by) obtained
    from financing activities</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">26,148</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(126,420)</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">469,148</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><P STYLE="font: xx-small Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">Increase (decrease) in cash
        and cash equivalents</FONT></P></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">2,514,222</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,525,070</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,372,563</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Effect of exchange rate fluctuation on cash and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">637,949</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(89,053)</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 0; padding-bottom: 6"><FONT STYLE="font-size: 10pt">(404)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Cash and cash equivalents at beginning of the year</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">3,384,917</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,948,900</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">576,741</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt"><B>Cash and cash equivalents at end of the year</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">6,537,088</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">3,384,917</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 2.25pt solid; text-align: right; padding-right: 3; padding-bottom: 6"><FONT STYLE="font-size: 10pt">1,948,900</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0.8pt 0 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>



<!-- Field: Page; Sequence: 48 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; padding-bottom: 12pt; border-bottom: Black 4px solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 28.35pt">Funds provided by operating activities include cash
payments for interest and income taxes as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #ACA89A 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 54%; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Total interest paid</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,410</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right; padding-right: 3"><FONT STYLE="font-size: 10pt">12,054</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">33,441</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Income taxes (recovery) paid</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">6,922</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(323,374)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">217,285</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"><B>Accounting for uncertainty in income taxes-</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt">The Company adopted the provisions of ASC 740 (formerly
FASB Interpretation No. 48,&ldquo;Accounting for Uncertainty in Income Taxes&rdquo; &ldquo;FIN 48&rdquo;) as of January 1, 2007.
FIN 48 did not have a material impact on the Company&rsquo;s financial statements either upon adoption or for the years ended December
31, 2008-2011.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 8.35pt 0 28.35pt">Under ASC 740 (formerly FIN 48), the Company has
to establish reserves to remove some or all of the tax benefit of any of our tax positions when is determine that it becomes uncertain
based upon one of the following conditions: (1) the tax position is not &ldquo;more likely than not&rdquo; to be sustained, (2)
the tax position is &ldquo;more likely than not&rdquo; to be sustained, but for a lesser amount, or (3) the tax position is &ldquo;more
likely than not&rdquo; to be sustained, but not in the financial period in which the tax position was originally taken.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 1pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 15.05pt 0 28.35pt">For purposes of evaluating whether or not a tax
position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge
of all relevant information, (2) the technical merits of a tax position are derived from authorities such as legislation and statutes,
legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances of the tax position,
and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions
taken.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 9.3pt 0 28.35pt">A number of years may elapse before a particular
uncertain tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments
varies depending on the tax jurisdiction and is generally three to five years for the countries in which the Company principally
operates. The tax benefit that has been previously reserved because of a failure to meet the &ldquo;more likely than not&rdquo;
recognition threshold would be recognized in our income tax expense in the first period when the uncertainty disappears under any
one of the following conditions: (1) the tax position is &ldquo;more likely than not&rdquo; to be sustained, (2) the tax position,
amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the relevant
taxing authority to examine and challenge the tax position has expired.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.65pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt"><B>Recent accounting pronouncements in the US</B></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 22pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt">In September 2011, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update No. 2011-09, Compensation &ndash; Retirement Benefits &ndash; Multiemployer Plans
(ASU 2011-09), which amends the guidance in ASC 715-80. The amendments in ASU 2011-09 are intended to provide additional information
relating to an employers&rsquo; financial obligations to multiemployer pension plans and multiemployer other postretirement benefit
plans. ASU 2011-09 is effective for annual periods ending after December 15, 2011. The Company plans to adopt this ASU and provide
the required disclosures in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt; text-align: justify">In June 2011, the FASB issued
Accounting Standards Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The amendments
in ASU 2011-05 require entities to present the total comprehensive income, the components of net income, and the components of
other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.
Additionally, the amendments in ASU 2011-05 require an entity to present on the face of the financial statements reclassification
adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components
of net income and components of other comprehensive income are presented. ASU 2011-05 is effective for interim and annual periods
beginning after December 15, 2011. In December 2011, the FASB issued Accounting Standards Update No. 2011-12, Comprehensive Income
(Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items out of Accumulated
Other Comprehensive Income in Accounting Standards Update No. 2011-05 (ASU 2011-12), to defer the new requirement to present components
of reclassifications of other comprehensive income on the face of the financial statements. The Company does not expect material
financial statement implications relating to the adoption of these ASUs in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22pt 0 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 28.35pt">In September 2011, the FASB issued Accounting Standards
Update No. 2011-08, Testing Goodwill for Impairment (ASU 2011-08), which amends the guidance in ASC 350-20. The amendments provide
entities with the option of performing a qualitative assessment before performing the first step of the two-step impairment test.
If entities determine, based on qualitative factors, it is not more likely than not that the fair value of the reporting unit is
less than the carrying amount, then performing the two-step impairment test would not be necessary. However, if an entity concludes
otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting
unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds
its fair value, then the entity is required to perform the second step to measure the amount of the impairment loss, if any. ASU
2011-08 also provides entities with the option to bypass the qualitative assessment for any reporting unit in any period and proceed
directly to the first step of the two-step impairment test. ASU 2011-08 is effective for interim and annual periods beginning after
December 15, 2011. The Company does not expect material financial statement implications relating to the adoption of this ASU in
2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.6pt 0 0">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.7pt 0 28.35pt; text-indent: 0.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.7pt 0 28.35pt; text-indent: 0.05pt">In December 2010, the FASB
issued ASU No. 2010-29, &ldquo;Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business
Combinations &mdash; a consensus of the FASB EITF&rdquo;. ASU No. 2010-29 amends accounting guidance concerning disclosure of supplemental
pro forma information for business combinations. If an entity presents comparative financial statements, the entity should disclose
revenue and earnings of the combined entity as though the business combination that occurred in the current year had occurred as
of the beginning of the comparable prior annual reporting period only. The accounting guidance also requires additional disclosures
to describe the nature and amount of material, nonrecurring pro forma adjustments. ASU No. 2010-29 is effective for fiscal years
beginning on or after December 15, 2010 and will apply prospectively to business combinations completed on or after that date.
The Company has adopted ASU 2010-29 and included the required disclosures relating to the Bluff City Steel business combination
which was completed in the first quarter of 2011 (see Reconciliation of net income under USGAAP).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.7pt 0 28.35pt; text-indent: 0.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.7pt 0 28.35pt; text-indent: 0.05pt">In September 2006, the FASB
issued SFAS No. 157, &ldquo;Fair Value Measurement.&rdquo; SFAS No. 157 was codified as a component of ASC 820.10 and it provides
a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting
principles more consistent and comparable. ASC 820.10 also requires expanded disclosures to provide information about the extent
to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the
effect of fair value measures on earnings. ASC 820.10 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The
three levels of the fair value hierarchy under ASC 820.10 are described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5.7pt 0 28.35pt; text-indent: 0.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 4.25pt 0 70.9pt; text-indent: -42.55pt">Level 1&ndash; &nbsp;&nbsp;&nbsp;unadjusted
quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 4.25pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 4.25pt 0 70.9pt; text-indent: -42.55pt">Level 2- &nbsp;&nbsp;&nbsp;&nbsp;Quoted prices in
markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the
asset or liability;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 2.15pt 9.65pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 4.25pt 0 70.9pt; text-indent: -42.55pt">Level 3- &nbsp;&nbsp;&nbsp;&nbsp;Prices or valuation
techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or
no market activity).</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.85pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 12.05pt 0 28.35pt">ASC 820.10 was adopted by the Company effective
January 1, 2008, for financial assets and liabilities and January 1, 2009, for nonfinancial assets and liabilities. ASC 820.10
is applied prospectively. ASC 820.10 did not have a material impact on the Company&rsquo;s financial statements either upon adoption
or for the years ended December 31, 2011, 2010 and 2009.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.95pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 9.6pt 0 28.35pt">The Company is exposed to counterparty credit risk
on all derivative financial instruments. Because the amounts are recorded at fair value, the full amount of the Company&rsquo;s
exposure is the carrying value of these instruments. Since the Company has contracted the derivative financial instruments with
Mexico and United States main Gas and Oil company the Credit Risk exposure is minimal</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 0 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 10.5pt 0 28.35pt">The following table provides a summary of significant
liabilities at December 31, 2011 and 2010 that are measured at fair value on a recurring basis:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt"></P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" STYLE="border-bottom: #A6A6A6 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Fair
        Value Measurement</B></FONT></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Level
    1</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Level
    2</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Level
    3</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; padding-top: 4.05pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Liabilities</B></FONT></TD>
    <TD STYLE="width: 2%; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-left: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Derivative financial instruments</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">35,456</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">35,456</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Related party debt</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">703,316</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">703,316</FONT></TD></TR>
</TABLE>
<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Level
    1</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Level
    2</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Level
    3</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; padding-top: 4.05pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Liabilities</B></FONT></TD>
    <TD STYLE="width: 2%; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-top: 4.05pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-left: 6"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Derivative financial instruments</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">79,708</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">79,708</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Related party debt</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">603,149</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">603,149</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 5pt Times New Roman, Times, Serif; margin: 0.25pt 0 0">&nbsp;</P>

<P STYLE="font: xx-small Times New Roman, Times, Serif; margin: 0.05pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 7.8pt 0 28.35pt">As of December 31, 2011 and 2010, the estimated
fair value approximates the carrying value of the related party debt.</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0.1pt 7.8pt 0 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.8pt 0 28.35pt">The fair value of financial derivative instruments
is calculated based on Level 2 inputs, which includes the following: natural gas commodity prices, foreign exchange rates, LIBOR
interest rates and the reporting entity own credit risk.</P>

<P STYLE="font: medium Times New Roman, Times, Serif; margin: 0.9pt 7.8pt 0 28.35pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center">GRUPO SIMEC, S.A.B. DE C.V. (PARENT
COMPANY ONLY)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><A NAME="finsa_009"></A>Condensed Balance Sheets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">December
31, 201</FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1</FONT> and 20<FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1</FONT>0</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">(In thousands of Mexican pesos)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: -2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Assets</B></FONT></TD>
    <TD STYLE="width: 7%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 13%; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Current
    assets:</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Cash
    and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">49,589</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">25,988</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Accounts
    receivable:</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 6pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Related
    parties</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,148,997</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,937,194</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 6pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Other
    receivables</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">50,644</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">28,815</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 6pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Recoverable
    taxes</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">5,610</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,528</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    accounts receivables, net</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,205,251</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,967,537</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    current assets</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,254,840</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">1,993,525</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; font-weight: bold; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Investment
    in subsidiaries companies</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">22,905,032</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">19,447,171</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Property,
    net</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">160,187</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">164,824</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Other
    assets, net</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">109,358</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">118,268</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    assets</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">24,429,417</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">21,723,788</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 92.9pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Liabilities
    and stockholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Current
    liabilities:</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Short-term
    debt</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">4,225</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">3,732</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Other
    accounts payable</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">8,065</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">18,370</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Related
    parties</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">2,284,383</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">2,879,022</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Taxes
    payable</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">25,669</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">30,077</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    current liabilities</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">2,322,342</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">2,931,201</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Deferred
    income taxes</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">14,110</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">18,245</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    liabilities</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">2,336,452</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">2,949,446</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Contingencies
    and Commitments</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Stockholders&rsquo;
    equity:</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Capital
    stock</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">4,142,696</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">4,142,696</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Additional
    paid-in capital</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">4,208,204</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">4,208,204</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Retained
    earnings</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">12,942,705</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">10,080,278</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Translation
    effect in foreign subsidiaries, net</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">824,805</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">406,513</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Fair
    value of derivative financial instruments</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 1pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">(25,445)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 1pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">(63,349)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    stockholders&rsquo; equity</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">22,092,965</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">18,774,342</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt; font-weight: normal">Total
    liabilities and stockholders&rsquo; equity</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">24,429,417</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt; text-autospace: none; font-size: 12pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; padding-left: 2pt; text-autospace: none; font-size: 12pt; text-align: right"><FONT STYLE="font-size: 10pt">21,723,788</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6.25pt 0 0"><FONT STYLE="font-weight: normal">See accompanying notes
to these condensed financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 284.15pt 0 0; text-align: right">&nbsp;</P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>GRUPO SIMEC, S.A.B. DE C.V.
(PARENT COMPANY ONLY) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><A NAME="finsa_010"></A>Condensed Statements of Operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">Years ended December 31, 2011, 2010
and 2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">(In thousands of Mexican pesos)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 11.75pt 0 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">Income (expenses):</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Equity in results of subsidiaries companies</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,834,437</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">995,723</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(719,792)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Leasing income</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">20,556</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">20,556</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">20,556</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Total of income (expense)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,854,993</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">1,016,279</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(699,236)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Costs and expenses:</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Depreciation and amortization</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">13,789</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">17,422</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">13,590</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Administrative</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">24,735</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">15,110</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">12,420</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Total costs and expenses</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">38,524</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">32,532</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">26,010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Operating income (loss)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,816,469</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">983,747</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(725,246)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Other income (expenses), net</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">37,695</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(107,972)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">562</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Comprehensive financing cost:</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Interest expense</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(40,999)</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(12,040)</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(218,029)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Interest income</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">6,201</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Foreign exchange gain (loss), net</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">45,127</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,203)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">3,430</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 12"><FONT STYLE="font-size: 10pt">Comprehensive financial result, net</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">4,128</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(13,243)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(208,398)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 12"><FONT STYLE="font-size: 10pt">Income (loss) before income tax</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,858,292</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">862,532</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(933,082)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">Income tax:</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Current</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: sub; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt"><SUB>-</SUB></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">1,333</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 6"><FONT STYLE="font-size: 10pt">Deferred (benefit)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(4,135)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(73,969)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(590,670)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>Net income (loss)</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,862,427</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">936,501</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 1pt; text-align: right"><FONT STYLE="font-size: 10pt">(343,745)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 5.5pt 0 0">See accompanying notes to these condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 283.7pt 0 0; text-align: right">&nbsp;</P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"></P>

<!-- Field: Page; Sequence: 52; Value: 1 -->
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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center"><B>GRUPO SIMEC, S.A.B. DE C.V.
(PARENT COMPANY ONLY)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><A NAME="finsa_011"></A>Condensed Statements of Cash Flows</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">Year ended December 31, 2011, 2010
and 2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">(In thousands of Mexican pesos)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 11.75pt 0.7pt 0 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2011</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2010</B></FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>2009</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Operating activities:</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Income (loss) before income tax</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,858,292</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">862,532</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(933,082)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Depreciation and amortization</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">13,789</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">17,422</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">13,590</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Equity in net results of subsidiaries companies</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,834,437)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(995,723)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">719,792</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Interest income</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(25,882)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(50,450)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(6,201)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Accrued interest</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">66,653</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">62,466</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">218,029</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Other provisions</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">21,204</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">8,907</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">99,619</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(94,846)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">12,128</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Increase in related parties receivables</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(107,202)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(448,017)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(746,331)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">(Increase) decrease in other accounts receivable</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(45,260)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(839)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">3,324</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">(Decrease) increase in other accounts payable
    and accrued expenses</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(12,160)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(11,792)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">344</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">(Decrease) increase in related parties payable</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(42,625)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">246,667</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,405,306)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Tax Payable</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(4,408)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">7,848</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Resources used in operating activities</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(112,036)</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(300,979)</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-top: #A6A6A6 1.5pt solid; border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(4,135,841)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Investing activities:</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Investment in others assets, long-term</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(205)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Acquisition of equipment</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(37)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(17)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Interest collected</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">18,076</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">35,276</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">6,201</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Collective from related intercompanies</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">1,231,881</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">1,822,189</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Increase in capital stock of subsidiaries
    companies</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(167,228)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(25,446)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,333)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Sales of shares of Grupo San to Simec International,
    subsidiary</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">4,351,882</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Loan to related intercompanies</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(328,676)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(2,274,352)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Resources provided by (used in) investing
    activities</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">753,811</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(442,350)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">4,356,750</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Financing activities:</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Exchange rate effect on financial debt</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">493</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(212)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(111)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Loans obtained from related intercompanies</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">810,758</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">4,819,214</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Payments of loans received from related intercompanies</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,377,188)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(4,236,838)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Interest paid</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(52,237)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(31,498)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,474)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 20.65pt"><FONT STYLE="font-size: 10pt">Resources (used in) provided by financing activities</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(618,174)</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">550,666</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,585)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 20.65pt"><FONT STYLE="font-size: 10pt">Net increase (decrease) in cash and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">23,601</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 1pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-size: 10pt">(192,663)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">217,324</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents at beginning of
    year</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">25,988</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">218,651</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 1.5pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">1,327</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents at end of year</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">49,589</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">25,988</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-size: 10pt">Ps.</FONT></TD>
    <TD STYLE="border-bottom: #A6A6A6 2.25pt solid; padding-right: 3.7pt; text-align: right"><FONT STYLE="font-size: 10pt">218,651</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 159.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 159.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 5.05pt 0 0 159.35pt; text-align: justify">See accompanying notes to
these condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.95pt 0 0; text-align: center">&nbsp;</P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.7pt 0 0 7.1pt; text-align: center">GRUPO SIMEC, S.A.B. DE C.V. (PARENT
COMPANY ONLY)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><A NAME="finsa_012"></A>Condensed Note to the Parent Only
Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Years
ended December 31, 201</FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1</FONT>, 20<FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">1</FONT>0
and 200<FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">9</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">(In thousands of Mexican pesos)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.1pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>1. Organization of the Company and certain other information:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 16.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.25pt 0 0 16.55pt">The accompanying condensed financial statements
of Grupo Simec, S.A.B. de C.V. (&ldquo;the Company&rdquo;) reflect its financial position at December 31, 2011 and 2010 and the related
results from operations and cash flows for each of the years ended December 31, 2011, 2010 and 2009. The Company was incorporated
in August 1990. These condensed financial statements do not reflect a complete set of financial statements nor do they include
all the disclosures required under Mexican Financial Reporting Standards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 17.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0 17.05pt; text-align: justify">Information with respect to
the Company&rsquo;s material commitments and contingencies are presented in note 20 to the consolidated financial statements of Grupo
Simec, S.A.B. de C.V. and subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 16.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1.9pt 0 0 16.8pt">These parent financial statements are presented in
conformity with Mexican financial reporting standards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">&nbsp;</P>






<P STYLE="margin: 0"></P>

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<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>2
<FILENAME>e48470ex8-1.htm
<DESCRIPTION>SUBSIDIARIES
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>Exhibit 8.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 64%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Name of
        Subsidiary</B></P></TD>
    <TD STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Country
        of<BR>
 Incorporation</B></P></TD>
    <TD STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Ownership
        <BR>
Interest (%)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Undershaft Investments, N.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Cura&ccedil;ao</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Pacific Steel, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">SimRep Corporation and subsidiaries (Republic)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">50.22%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Coordinadora de Servicios Sider&uacute;rgicos de Calidad, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Comercializadora Simec, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Industrias del Acero y del Alambre, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Procesadora Mexicali, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Servicios Simec, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Sistemas de Transporte de Baja California, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Operadora de Metales, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Operadora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Operadora de Servicios de la Industria Sider&uacute;rgica ICH, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Arrendadora Simec S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Arrendadora Norte de Matamoros, S.A. de C.V. (sold in May, 2011)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">CSG Comercial, S.A. de C.V</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.95%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Comercializadora de Productos de Acero de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.95%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Sider&uacute;rgica de Baja California, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.95%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Corporaci&oacute;n Aceros DM, S.A. de C.V. and subsidiaries</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Comercializadora MSAN, S.A de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International 2, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International 3, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International 4, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International 5, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">U.S.A.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Corporaci&oacute;n ASL, S.A. de C.V. (since 2010)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International 6, S. A. de C. V. (since 2010)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -1pt; padding-left: 2pt">Acero Transportes San, S. A. de C. V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec International 7, S. A. de C. V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">99.99%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec Acero, S. A. de C. V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec USA, Corp.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Pacific Steel Projects, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Simec Steel, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">United States</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Corporativos G&amp;DL, S.A. de C.V.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Mexico</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">GV do Brasil Industria e Comercio de A&ccedil;o LTDA.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Brazil</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">100.00%</TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TYPE>EX-12.1
<SEQUENCE>3
<FILENAME>e48470ex12-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: right"><B>Exhibit 12.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Annual Certifications</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Adolfo Luna Luna, certify that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report
on Form 20-F of Grupo Simec, S.A.B. de C.V.;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this annual
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the company as of, and for, the periods presented in this report;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company&rsquo;s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the company and have:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control
over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with general accepted accounting principles;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of
the company&rsquo;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change
in the company&rsquo;s internal control over financial reporting that occurred during the period covered by the annual report that
has materially affected, or is reasonably likely to materially affect, the company&rsquo;s internal control over financial reporting;
and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company&rsquo;s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company&rsquo;s
auditors and the audit committee of the company&rsquo;s board of directors (or persons performing the equivalent functions):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and
material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the company&rsquo;s ability to record, process, summarize and report financial information; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material,
that involves management or other employees who have a significant role in the company&rsquo;s internal control over financial
reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Dated: May 15, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-size: 10pt">
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 4%; font-family: Times New Roman, Times, Serif">By:&nbsp;&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; border-bottom: Black 1pt solid">/s/ Adolfo Luna Luna</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Adolfo Luna Luna</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Chief Financial Officer</TD></TR>
</TABLE>


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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<DOCUMENT>
<TYPE>EX-12.2
<SEQUENCE>4
<FILENAME>e48470ex12-2.htm
<DESCRIPTION>CERTFICATION
<TEXT>
<HTML>
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</HEAD>
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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: right"><B>Exhibit 12.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Annual Certifications</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Luis Garcia Lim&oacute;n, certify
that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report
on Form 20-F of Grupo Simec, S.A.B. de C.V.;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this annual
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the company as of, and for, the periods presented in this report;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company&rsquo;s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the company and have:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control
over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with general accepted accounting principles;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of
the company&rsquo;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change
in the company&rsquo;s internal control over financial reporting that occurred during the period covered by the annual report that
has materially affected, or is reasonably likely to materially affect, the company&rsquo;s internal control over financial reporting;
and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company&rsquo;s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company&rsquo;s
auditors and the audit committee of the company&rsquo;s board of directors (or persons performing the equivalent functions):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and
material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the company&rsquo;s ability to record, process, summarize and report financial information; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material,
that involves management or other employees who have a significant role in the company&rsquo;s internal control over financial
reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Dated: May 15, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-size: 10pt">
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 4%; font-family: Times New Roman, Times, Serif">By:</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; border-bottom: Black 1pt solid">/s/ Luis Garcia Lim&oacute;n</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Luis Garcia Lim&oacute;n</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Chief Executive Officer</TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"></P>

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<TYPE>EX-13.1
<SEQUENCE>5
<FILENAME>e48470ex13-1.htm
<DESCRIPTION>CERTIFICATION
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: right"><B>Exhibit 13.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Annual Certifications</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to section 906 of the Sarbanes-Oxley
Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers
of Grupo Simec, S.A.B. de C.V. (the &ldquo;Company&rdquo;), does hereby certify, to such officer&rsquo;s knowledge, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Report on Form 20-F for
the year ended December 31, 2011 of the Company, as filed with the Securities and Exchange Commission on May 15, 2012, fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form
20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Dated: May 15, 2012</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-size: 10pt">
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; border-bottom: Black 1pt solid">/s/ Luis Garcia Lim&oacute;n</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Luis Garcia Lim&oacute;n</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; border-bottom: Black 1pt solid">/s/ Adolfo Luna Luna</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Adolfo Luna Luna</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">Chief Financial Officer</TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 4pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>



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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
