<SEC-DOCUMENT>0000891092-13-004597.txt : 20130515
<SEC-HEADER>0000891092-13-004597.hdr.sgml : 20130515
<ACCEPTANCE-DATETIME>20130515135202
ACCESSION NUMBER:		0000891092-13-004597
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20121231
FILED AS OF DATE:		20130515
DATE AS OF CHANGE:		20130515

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:		13845656

	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>e53688-20f.htm
<DESCRIPTION>ANNUAL REPORT
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; border-top: Black 1pt solid">&nbsp;</P>

<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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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: 0.3in">[_]</TD><TD>REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</TD></TR></TABLE>

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

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">[X]</TD><TD>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">For the fiscal year ended December
31, 2012</P>

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

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">[_]</TD><TD>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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: 0.3in">[_]</TD><TD>SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</TD></TR></TABLE>

<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&#8217;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>Mario Moreno Cortez, telephone number 011-52-33 3770-6700, e-mail mmoreno@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>

<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; 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>
</TABLE>
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<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&#8217;s classes of common stock as of December 31, 2012 was:</B></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">Series B Common Stock &#8212; 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; 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; 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 &#8220;accelerated filer and large accelerated
filer&#8221; 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 [X]&nbsp;International Financial Reporting
Standards as issued by the International Accounting Standards Board&nbsp;[_]&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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-size: 10pt; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-bottom: 6pt">&nbsp;</TD>
    <TD STYLE="width: 78%; padding-bottom: 6pt">&nbsp;</TD>
    <TD STYLE="width: 7%; 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">&nbsp;</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">
      <P><A HREF="#a_002">Identity of Directors, Senior Management and Advisers</A></P>
    </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">62</TD>
  </TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt">Item 7.</TD>
    <TD STYLE="padding-bottom: 6pt"><A HREF="#a_007">Major Shareholders and Related Party Transactions</A></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">69</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">70</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">72</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">74</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">87</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">88</TD>
  </TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt"><B><A HREF="#a_015">PART II</A></B></TD>
    <TD STYLE="padding-bottom: 6pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">89</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">89</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">90</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">98</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">98</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">98</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">98</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">99</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">99</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">99</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">99</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">&nbsp;</TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">101</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">101</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">101</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">101</TD>
  </TR>
</TABLE>



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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 &#8220;we,&#8221; &#8220;our,&#8221; &#8220;the company,&#8221; &#8220;our
company&#8221; and &#8220;us&#8221; 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 &#8220;U.S.
dollars&#8221; or &#8220;U.S.$&#8221; are to the lawful currency of the United States. References in this annual report to &#8220;pesos&#8221;
or &#8220;Ps.&#8221; are to the lawful currency of Mexico. References to &#8220;tons&#8221; 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 &#8220;special bar quality
steel&#8221; or &#8220;SBQ steel&#8221; 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. 12.9880 per U.S.$1.00, the interbank
transactions rate in effect on December 31, 2012. On April 30, 2013, the interbank transactions rate for the peso was Ps.12.13
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 &#8220;forward looking statements&#8221; 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 &#8220;anticipates,&#8221;
&#8220;plans,&#8221; &#8220;believes,&#8221; &#8220;estimates,&#8221; &#8220;intends,&#8221; &#8220;expects,&#8221; &#8220;projects&#8221;
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&#8217;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">&middot;</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">&middot;</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">&middot;</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">&middot;</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">&middot;</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">&middot;</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">&middot;</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">&middot;</FONT></TD><TD>the factors discussed in Item 3.D &#8211; &#8220;Risk Factors&#8221; 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="color: #010000; 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>PART
I</P>


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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_002"></A></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item</FONT></TD><TD><FONT STYLE="color: #010000">&nbsp;1.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Identity
of Directors, Senior Management and Advisers</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, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_003"></A></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item</FONT></TD><TD><FONT STYLE="color: #010000">&nbsp;2.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Offer
Statistics and Expected Timetable</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, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_004"></A></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item</FONT></TD><TD><FONT STYLE="color: #010000">&nbsp;3.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Key
Information</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><FONT STYLE="color: #010000">A.</FONT></TD><TD>Selected Financial Data</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">This annual report includes our consolidated
financial statements as of December 31, 2011 and 2012. Beginning January 1, 2011, we adopted International Financial Reporting
Standards (IFRS), and its amendments and interpretations in effect as of December 31, 2012, issued by the International Accounting
Standard Board (IASB); consequently, it applied IFRS 1, <I>Initial Adoption of International Financial Reporting Standards</I>.
We have adjusted the financial statements of our subsidiaries to conform to IFRS, and we have translated them to Mexican pesos.
See Note 5(a) to our consolidated financial statements included elsewhere herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt"><B><I>Transitions to IFRS &#8211; </I></B>Our
last annual consolidated financial statements were prepared in accordance with Mexican Financial Reporting Standards (MFRS). Certain
accounting standards and valuation methods applied in the previously issued 2011 consolidated financial statements prepared in
accordance with MFRS differ from the accounting standards and valuation methods of IFRS. Accordingly, the comparative 2011 amounts
were reformulated to reflect these adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">The reconciliations and descriptions of the
effects of our transition from MFRS to IFRS are explained in Note 28 to our consolidated financial statements included elsewhere
herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">Our transition date to IFRS was January 1,
2011. In preparing its first consolidated financial statements in accordance with IFRS, we applied transitional rules to the figures
previously reported in accordance with MFRS. IFRS 1 generally require the retroactive application of all IFRS and related improvements
and interpretation in an entity&#8217;s first IFRS financial statements. However, IFRS 1 requires certain mandatory exceptions
and permits other optional exemptions from retroactive application in order to assist entities in their transition process. We
have applied the following mandatory exceptions as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 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: 35.45pt"></TD><TD STYLE="width: 14.2pt">-</TD><TD><B><I>Accounting estimates</I></B> &#8211; Accounting estimates made under MFRS in 2011 are consistent with estimates under
IFRS made for the same periods and are thus, not retrospectively modified, except for the fixed asset componentization as explained
in Note 28 to our consolidated financial statements included elsewhere herein.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&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: 35.45pt"></TD><TD STYLE="width: 14.2pt">-</TD><TD><B><I>Hedging instruments - </I></B>Certain hedging instruments that were designated as hedges under MFRS qualify for hedge
accounting under IAS 39, Financial Instruments: Recognition and Measurement. No designations of hedging relationships were made
retrospectively.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt"><B><I>&nbsp;</I></B></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: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">Other mandatory exceptions were not applicable to us.</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 0 0 28.35pt">Additionally, we have applied the option for first-time
adoption exemptions as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected not to apply IFRS 3, Business Combinations (as revised in 2008) retrospectively to
prior business combinations that occurred before its date of transition to IFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&nbsp;</P>


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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected to value the items of property, plant and equipment at their book value under MFRS
at the transition date, which represents the depreciated cost adjusted for price changes of a specific index (deemed cost).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected to recognize all cumulative unrecognized actuarial gains and losses at the date of
transition to IFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected to reset the balance of cumulative translation adjustment of foreign subsidiaries
at the date of transition.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We applied the transitional provisions set out in paragraphs 27 and 28 of IAS 23, Borrowing Costs.
Therefore, we designated the transition date to IFRS as the commencement date for capitalization of borrowing costs relating all
qualifying assets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</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 December 31, 2011 and 2012 and January 1, 2011 and for the years ended
December 31, 2011 and 2012. The selected financial and operating information as of and for the years ended December 31, 2010, 2011
and 2012 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 (&#8220;BDO&#8221;), and BDO have relied
on the audited combined financial statements of Corporaci&oacute;n Aceros DM., S.A. de C.V. (&#8220;Aceros DM&#8221;) subsidiaries
and affiliates, reported on by Marcelo de los Santos y C&iacute;a., S. C. a practice member of Moore Stephens International (&#8220;Moore
Stephens&#8221;). The consolidated financial statements of our subsidiary SimRep for the years ended December 31, 2011 and 2012
were reported on by BDO USA, LLP. The consolidated financial statements of our subsidiary GV do Brasil Industria e Comercio LTDA
A&ccedil;o for the year ended December 31, 2012 were reported on by BDO RCS SS. 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 CELLSPACING="0" CELLPADDING="0" STYLE="font: 7pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>As of January 1,</B></FONT></TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>As of and
        for Year Ended December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2011 (1)</B></P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2012 (1)</B></P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2012(2)</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">(Millions of pesos, except per share and ADS data and operational data)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">(Millions of U.S.<BR>
dollars)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Income Statement</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Data:</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B><I>IFRS</I></B><I>:</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Net sales&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;29,270</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;29,524</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,273</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Cost of sales&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;<U>&#9;25,563</U></FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;<U>&#9;25,960</U></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;<U>&#9;1,999</U></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Gross profit&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,707</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,564</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;274</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Administrative expenses&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;595</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;753</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;58</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Depreciation and amortization&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;455</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;475</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;37</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Other (expense) income, net&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(113)</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;181</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;14</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Interest income</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;26</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;23</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Interest expense</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;24</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;23</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Foreign exchange gain (loss)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;582</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(509)</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(39)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Income (loss) before taxes&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,128</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,008</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;154</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Income tax expense&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;<U>&#9;149</U></FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;<U>&#9;54</U></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;<U>&#9;4</U></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Net income&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,979</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,954</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;150</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Non-controlling&nbsp;&nbsp;interest income (loss)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;87</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(116)</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(9)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Controlling interest income (loss)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,892</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,070</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;159</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Net income (loss) per share&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.81</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.32</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Net income (loss) per ADS(3)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.43</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.48</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.96</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Weighted average shares outstanding (thousands)(3)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">

        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; text-align: right">N/A</P></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;497,709</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;497,709</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;497,709</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Weighted average ADSs outstanding (thousands)(3)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;165,903</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;165,903</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;165,903</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Balance Sheet Data:</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><I>IFRS:</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Total assets&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">27,147</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;31,119</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;32,456</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,499</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Total short-term liabilities&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">3,898</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,823</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,737</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;288</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Total long-term liabilities(4)&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">2,788</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,165</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,052</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;235</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Total stockholders&#8217; equity&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">20,461</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;24,131</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;25,667</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,976</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Cash Flow Data:</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><I>IFRS:</I></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Cash provided by operating activities&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,954</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,655</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;281</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Cash provided by (used in) financing activities&#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;-</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(23)</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(2)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Cash (used in) provided by investing activities &#9;</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(440)</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(1,507)</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;(116)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 14%; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>As of January 1,</B></FONT></TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>As of and
        for Year Ended December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="1" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2011 (1)</B></P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2012 (1)</B></P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2012(2)</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">(Millions of pesos, except per share and ADS data and operational data)</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: center; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">(Millions of U.S.<BR>
dollars)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Other Data:</B></FONT></TD>
    <TD STYLE="width: 15%; padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><I>IFRS:</I></FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Capital expenditures&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;432</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,304</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;100</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Adjusted EBITDA(5)&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,607</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,348</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;257</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Working capital(6)&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">8,288</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;12,376</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;13,583</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,046</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Depreciation and Amortization&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;950</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,012</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;78</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Dividends declared&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;0</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;0</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;0</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">&nbsp;</TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Operational Data:</B></FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">(capacity and production in thousands of tons):</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Annual installed capacity(7)&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,522</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,758</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;3,791</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Total tons shipped&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,241</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,289</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;2,262</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Mexico&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,225</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,275</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,357</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">United States, Canada and elsewhere outside Mexico&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,016</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,014</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;905</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">SBQ steel&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,109</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,178</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,111</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Structural and other steel products&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,132</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,111</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,151</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Per ton data</B></FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><I>IFRS:</I></FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Net sales per ton&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;12,787</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;13,052</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,005</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Cost of sales per ton&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;11,168</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;11,477</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;884</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Adjusted EBITDA(5) per ton&#9;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 35.75pt; padding-left: 5.75pt; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">N/A</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,576</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;1,480</FONT></TD>
    <TD STYLE="text-align: right; padding-right: 5.75pt; padding-left: 5.75pt; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;114</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Number of employees&#9;</FONT></TD>
    <TD STYLE="padding-right: 35.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;4,361</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;4,686</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&#9;5,086</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Consolidated income statements in accordance with IFRS for the years 2011 and 2012.</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>Peso amounts have been translated into U.S. dollars solely for the convenience of the reader, at the exchange rate of Ps. 12.9880
per U.S.$1.00, the interbank transactions rate in effect on December 31, 2012.</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>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 &#8220;ADS,&#8221; represents
three series B shares. Previously one ADS represented one series B share.</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">(4)</TD><TD>Total long-term liabilities include amounts relating to deferred taxes.</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">(5)</TD><TD>Adjusted EBITDA is not a financial measure computed under Mexican or U.S. GAAP or IFRS. Adjusted EBITDA is derived from our
IFRS financial information and means IFRS net income excluding: (i) depreciation, amortization and impairment loss; (ii) financial
income (expense), net (which is composed of net interest expense and 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 or IFRS 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">&middot;</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">&middot;</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">&middot;</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>

<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: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 8pt Symbol">&middot;</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>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: 0in"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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="4" 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>Year Ended
        December 31,</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; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2011 (1)</B></P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2012 (1)</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>2012(2)</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">(millions of pesos)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">(millions
of U.S. dollars)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>IFRS:</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Net income&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;2,979</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;1,954</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;150</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depreciation and amortization&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;950</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;1,012</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;78</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other (expense) income&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;&nbsp;(113)</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;181</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;14</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Interest income</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;&nbsp;26</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;23</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Interest Expense</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;24</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;23</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foreign exchange gain (loss)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;582</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;(509)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;(39)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Income tax expense&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.1in; border-bottom: Black 0.5pt solid">149</P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.1in; border-bottom: Black 0.5pt solid">54</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.1in; border-bottom: Black 0.5pt solid">4</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Adjusted EBITDA&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;3,607</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;3,348</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;257</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 149px; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 8px; text-align: right; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&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">(6)</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">(7)</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 Mexican 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>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">Exchange Rates</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="width: 44%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Year Ended December 31 </B></FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>High</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Low</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Average
        (1)</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Period
        End</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2008&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.94</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">9.92</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.14</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.83</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.41</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.63</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.50</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.06</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.19</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.16</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.62</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.38</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.25</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.51</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.44</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.95</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2012&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.37</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.63</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.15</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.96</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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="width: 44%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Year Ended December 31 </B></FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>High</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Low</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Average
        (1)</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><B>Period
        End</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Month in 2013</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">January&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.79</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.59</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.70</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.73</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">February&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.88</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.63</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.72</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.78</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">March&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.80</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.32</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.50</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.32</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">April&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.34</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.07</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.21</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.13</FONT></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>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>


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<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, Times, Serif; 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, Times, Serif; 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, Times, Serif; 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 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, 2011 and 2012, 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 increased approximately 34% and 21% in 2010 and 2011
respectively, in 2012 increased approximately 1%; and prices of ferroalloys increased approximately 22% and 10% in 2010 and 2011
respectively, in 2012 decreased approximately 10%. As with other raw materials, iron ore and coke prices fluctuated significantly;
however, in 2010, 2011 and 2012 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 8% in 2010, 11% in 2011 and 3% in 2012; and
prices for natural gas decreased approximately 18% in 2010, 14% in 2011 and 32% in 2012. 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 11% for
2012 compared to 12% for 2011.</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 &#8220;CFE&#8221;) for electricity. We also pay special rates to Pemex, Gas y Petroqu&iacute;mica B&aacute;sica,
(&#8220;PEMEX&#8221;), 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
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 appropriate. As of December 31, 2012, we have entered into derivative financial
instruments in Mexico to cover risks of fluctuations in the price of natural gas with PEMEX. 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>


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<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>

<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">&middot;</FONT></TD><TD>disruption of our ongoing business;</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">&middot;</FONT></TD><TD>diversion of our resources and of management&#8217;s time;</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">&middot;</FONT></TD><TD>decreased ability to maintain uniform standards, controls, procedures and policies;</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">&middot;</FONT></TD><TD>difficulty managing the operations of a larger company;</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">&middot;</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">&middot;</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">&middot;</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">&middot;</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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 four 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, 2011 and 2012, 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">&middot;</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>

<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">&middot;</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>

<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">&middot;</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 (&#8220;SimRep&#8221;) and its subsidiaries, including
Republic Engineered Products, Inc. (&#8220;Republic&#8221;), 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 (&#8220;Audit Committee&#8221;) 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">control over financial reporting at the SimRep evaluation
level. Specifically, our external auditor noted material weaknesses with regard to what it characterized as &#8220;management override
of internal controls&#8221; and identified five specific &#8220;management overrides.&#8221; In addition, our external auditor
also noted material weaknesses in internal control over financial reporting with regard to SimRep&#8217;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"><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">&middot;</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">&middot;</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">&middot;</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">&middot;</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"><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 &#8220;management override of
internal controls&#8221; 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&#8217;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">&middot;</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</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 1in">Committee in order to monitor the remediation procedures
previously adopted with respect to previous accounting periods;</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">&middot;</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">&middot;</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">&middot;</FONT></TD><TD>A lack of appropriate accounting resources at SimRep, which led to material weaknesses with respect to SimRep&#8217;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&#8217; 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" 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">&middot;</FONT></TD><TD>Significant deficiencies were detected also on 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.</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 35.4pt">Fiscal Year Ended December 31,
2012. <FONT STYLE="font-style: normal">In our assessment of our internal controls over financial reporting for the year ended December
31, 2012, we and our auditors identified the following material weaknesses:</FONT></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">&middot;</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) failure to keep all our policies and procedures, including IFRS accounting policies,
updated; (ii) limited IFRS understanding within our Internal Audit department; (iii) inadequate controls in the review and approval
process of the disclosures of our financial statements; (iv) poor maintenance of our whistleblower line for the Mexican subsidiaries;
(v) ineffective controls in our patents registry; (vi) inadequate distribution and segregation of duties within our accounting
department; (vii) deficient distribution to employees and officers of our code of ethics; (viii) failure to integrate all control
processes into an Enterprise Resource Planning (ERP) system; (ix) lack of an accounting manual with accounting instructions for
our most important transactions; (x) failure to create and implement a training plan for our management personnel preparing financial
records; and (xi) incomplete monitoring of certain control deficiencies identified on previous years;</TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Inadequate supervision and controls within our accounting department which prejudiced the financial statement closing process,
conversion of foreign subsidiaries, presentation of financial statements and assets valuation, 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">&middot;</FONT></TD><TD>A lack of an appropriate consolidation system to allow our management to supervise properly the preparation of consolidated
financial information with the required detail;</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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Deficient and not standardized controls in SimRep related to the physical inventory counts and a very vulnerable procedure
to determine costs due to manual calculations, and;</TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>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) failure to timely approve our policies and procedures
to prepare financial statements in accordance with IFRS and limited knowledge of those standards, (ii) undocumented process and
deficient controls in the control access to information systems, (iii) deficient controls to review and approve cost calculation
of finished goods, (iv) lack of physical inventory of fixed assets; and (v) failure to document and communicate adequately responsibilities
and authority of key financial roles.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">See Item 15.B &#8220;Controls and Procedures&#8212;Management&#8217;s
Annual Report on Internal Control Over Financial Reporting &#8211; Material Weaknesses&#8221; and Item 15.C &#8220;Attestation
Report of the Independent Registered Public Accounting Firms&#8221; and Item 15.D &#8220;Changes in Internal Control over Financial
Reporting&#8221;.</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 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 in a range from 3% to 5% for steel products, in 2012 these tariffs
were eliminated. 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, 2012, approximately 80%
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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 (&#8220;Mittal Steel&#8221;), were effective through April 30, 2009, at which time Mittal Steel transferred
its Lackawanna plant to Tecumseh Redevelopment, Inc. (&#8220;Tecumseh&#8221;). In December 2010, Tecumseh transferred a portion
of the former Mittal Steel facility to Great Lakes Industrial Development, LLC (&#8220;GLID&#8221;). 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 2012, 2011 and 2010, sales to our ten largest customers in the United States accounted for
approximately 42.4%, 40.4% and 38.6% of our consolidated revenues in the United States, respectively, and approximately 18.7%,
19.5 and 19% 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 &#8220;approved supplier.&#8221; The automotive
industry has put these stringent conditions in place for the production of auto parts to assure a vehicle&#8217;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 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. &#8220;Financial Information&#8212;Legal
Proceedings.&#8221;</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&#8217;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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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&#8217;s federal government is also considering
various approaches for reducing greenhouse gas emissions, although we do not presently believe Republic&#8217;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 these negotiations or whether any of the countries in which we operate will sign on to any 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 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, S.A.B.
DE C.V., (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 8, 2013, 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>


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<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, including Mexico, 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">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 continue to 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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, 2011 and 2012 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 37% of our net sales of SBQ in 2012. 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 bankruptcy protection. A reduction in vehicles
manufactured in North America, the principal market for Republic&#8217;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"></P>

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<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 and 2012 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">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.
The candidate of the <I>Partido Revolucionario Institucional</I> won the Mexican presidential elections in July 2012, 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&#8217;s economy and, as a result, on our financial performance.</P>


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<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 2012 the exchange rate registered a low of
Ps. 12.63 to U. S.$1.00 and a high of Ps. 14.37 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 4.4% for 2010, 3.8% for 2011 and 3.6% for 2012.
High inflation rates could adversely affect our business and results of operations by reducing consumer purchasing power, thereby
adversely 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&#8217; 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.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 IFRS 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">Beginning January 1, 2011, we adopted
International Financial Reporting Standards (IFRS), and its amendments and interpretations in effect as of December 31, 2012, issued
by the International Accounting Standard Board (IASB); consequently, we applied IFRS 1, <I>Initial Adoption of International Financial
Reporting Standards</I>. The reconciliations and descriptions of the effects of the Company&#8217;s transition from MFRS to IFRS
are explained in Note 28 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">All Mexican companies listed on the Mexican
Stock Exchange must prepare their financial statements in accordance with IFRS 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.</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="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_005"></A></TD><TD NOWRAP STYLE="width: 0.25in">Item&nbsp;4.&nbsp;&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in">&nbsp;Information
on the Company</TD></TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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 2011 and 2012 we were an important producer of SBQ products in both the United States and Mexico,
in each case in terms of sales volume. We also believe that in 2011 and 2012 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.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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.
(&#8220;CSG&#8221;), a mini-mill steel company. In 1980, Grupo Sidek, S.A. de C.V. (&#8220;Sidek&#8221;), 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 &#8220;Grupo Sidenor&#8221;) located
in Apizaco, Tlaxcala and Cholula, Puebla. We refer to this acquisition as the &#8220;Atlax Acquisition.&#8221; 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&#8217;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. (&#8220;ACOSA&#8221;). 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 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 (&#8220;Grupo San&#8221;) 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&#8217;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>


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<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 responsible
for all export sales of our Mexican companies.</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">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. 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Industries LLC and affiliates (&#8220;Bluff City Steel&#8221;),
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) the merger of Procesadora Industrial San S.A. de C.V. into Mall San S.A. de C.V. was authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 2011, we entered into an
agreement with an unrelated third-party &#8220;purchaser&#8221; for the factoring of specific accounts receivable in order to increase
our 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&#8217;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 us 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 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
our accounts receivable (as defined by the Uniform Commercial Code of the USA). For the years ended December 31, 2012 and 2011,
we sold a face amount of U.S. $31.2 million and U.S.$11.0 million, respectively, of accounts receivables to the purchaser. Discount
fees incurred by us pursuant to this agreement were approximately U.S. $0.5 million and U.S.$0.2 million for the year ended December
31, 2012 and 2011, respectively. There were US $2.6 million and US$ 0.9 million of accounts receivable that had been factored but
which had not been collected by the purchaser at December 31, 2012 and 2011, respectively, and therefore was subject to charge-back
to us.</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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On August 1, 2012 in their respective
extraordinary shareholders meetings of Abastecedora Sider&uacute;rgica, S.A. de C.V. and Aceros DM, S.A. de C.V. (subsidiaries
of Grupo San) the merger of both companies was authorized, whereby Abastecedora Sider&uacute;rgica, S.A. de C.V. was merged into
Aceros DM, S.A. de C.V.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On October 8, 2012 in their respective
extraordinary shareholders meetings of Simec Steel, Inc., Simec International 2, Inc., Simec International 3, Inc. and Simec International
4, Inc., the merger of three subsidiaries was authorized, whereby Simec International 2, Inc., Simec International 3, Inc., Simec
International 4, Inc. were merged into Simec Steel, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On October 30, 2012, we and Corporacion
ASL, S.A. de C.V. (subsidiary of Simec) purchased shares of a company called Orge S.A. de C.V. (Orge) for Ps. 27 million, on that
same date, Corporacion ASL, S.A. de C.V. made a capital increase of Ps. 67 million, which proceeds were used for the payment of
an outstanding liability of Orge. The shares acquired correspond to one share of Class &quot;I&quot;, &quot;B&quot; series, which
represents 0.01% of the shares of such class, and 53,564,127 shares of Class &quot;II&quot;, &quot;L&quot; series, which represent
100% of the shares of such class. These shares are without par value and shares of Class &quot;II&quot; are restricted and confer
limited voting rights and no power to appoint the management of the company, however the Board of Directors is comprised exclusively
of officers and shareholders of Grupo Simec, S.A.B. de C.V., therefore, from that date on, we consolidate the financial statements
of Orge. Orge was incorporated on July 19, 2012 through a split and tax losses of Ps. 498 million were transferred. Before we acquired
the shares, Orge had a loss on the sale of certain securities that will carry a tax loss of Ps. 1,700 million. Orge is engaged
in the production of steel and began operating in October 2012.</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 2013 will be approximately Ps. 3,620.3 million (U.S.$278.7 million), consisting of Ps. 618.4 million (U.S.$47.6 million)
of estimated capital expenditures in our Republic facilities, Ps. 522.3 million (U.S.$40.2 million) of capital expenditures in
our facilities in Mexico and Ps. 2,479.6 (U.S.$190.9 million) for the construction of a new steel facility in Brazil. Nevertheless,
this estimate is subject to certain uncertainties and actual capital expenditures in 2013 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 2012, we spent Ps. 366.2 million (U.S.$28
million) on capital investments for Republic&#8217;s facilities, including Ps. 234.8 million (U.S.$18 million) at the Lorain, Ohio
facility, Ps. 7.6 million (U.S.$0.6 million) at the Lackawanna, New York facility, Ps. 104.9 million (U.S.$8 million) at the Canton,
Ohio facility, Ps. 12 million (U.S.0.9 million) at our corporate location in Ohio, Ps. 0.2 million (U.S.$.01 million) at the Gary,
Indiana facility, Ps. 5.5 million (U.S.0.4 million) at the Solon, Ohio facility, and Ps. 1.2 million (U.S.$0.09 million) at the
Hamilton, Ontario, Canada facility. We spent Ps. 344.8 million (U.S.$26.5 million) on capital improvements at our facilities in
Mexico, including Ps. 120.7 million (U.S.$9.3 million) at the Apizaco facility, Ps. 28.8 million (U.S.$2.2 million) at the Mexicali
facility, Ps. 25 million (U.S.$1.9 million) at the Guadalajara facility, and Ps. 170.3 million (U.S.$13.1 million) at the San Luis
facilities. We also spent Ps. 592.9 million (U.S.$45.6 million) in the construction of a new steel facility on Pindamonhangaba,
Sao Paulo State, Brazil, and is estimated to become operational in December 2013.</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&#8217;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(d) 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>


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<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&#8217;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>

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<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 3.8 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>a mini-mill in Guadalajara, Jalisco;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>a mini-mill in Mexicali, Baja California Norte;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>a mini-mill in Apizaco, Tlaxcala;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>a cold finishing facility in Cholula, Puebla;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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 2012, we had net sales of Ps. 29.5
billion, gross profit of Ps. 3.6 billion and net income of Ps. 2.0 billion. In 2012, approximately 45.3% of our consolidated sales
were in the United States and Canada, approximately 53.3% were in Mexico, and approximately 1.4% 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>


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<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">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><I>I-beams</I>. I-beams, also known as standard beams, are &#8220;I&#8221; 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><I>Channels</I>. Channels, also known as U-Beams because of their &#8220;U&#8221; 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>

<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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><I>Angles</I>. Angles are two equal sided sections joined by their ends with a 90&ordm; angle, in an &#8220;L&#8221; 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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 &#8220;peeling&#8221; 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>


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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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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">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 CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; border-bottom: Black 0.5pt solid; margin-bottom: 0; text-align: center"><B>Years ended
        December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 10.8pt; padding-left: 10.8pt; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; border-bottom: Black 0.5pt solid; margin-bottom: 0; text-align: center"><B>2010</B></P></TD>
    <TD STYLE="width: 17%; padding-right: 10.8pt; padding-left: 10.8pt; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; border-bottom: Black 0.5pt solid; margin-bottom: 0; text-align: center"><B>2011</B></P></TD>
    <TD STYLE="width: 16%; padding-right: 10.8pt; padding-left: 10.8pt; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; border-bottom: Black 0.5pt solid; margin-bottom: 0; text-align: center"><B>2012</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(thousands of tons)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">I-Beams&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;70.3</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;72.8</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">77.7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Channels&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;66.8</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;62.1</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">66.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Angles (1)&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;167.6</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;159.3</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">152.1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hot-rolled bars (round, square and hexagonal rods)&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;926.2</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;954.5</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">871.7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Flat bar&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;91.5</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;101.0</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">97.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;533.1</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;536.4</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">627.5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cold finished bars&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;166.5</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;181.2</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">192.0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other semi-finished trade products (2)&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;67.5</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;72.9</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">42.1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Electro-Welded wire mesh&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;47.8</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;22.1</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Wire rod&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;63.0</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;37.7</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">21.4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Electro-Welded wire mesh panel&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;0.0</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;34.5</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">26.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: right; margin-bottom: 0; border-bottom: Black 0.5pt solid">40.8</P></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: right; margin-bottom: 0; border-bottom: Black 0.5pt solid">54.2</P></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; border-bottom: Black 0.5pt solid; margin-bottom: 0; text-align: right">66.6</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.25in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total steel sales&#9;</FONT></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: right; margin-bottom: 0; border-bottom: Black 1.5pt double">2,241.1</P></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: right; margin-bottom: 0; border-bottom: Black 1.5pt double">2,288.7</P></TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; border-bottom: Black 1.5pt double; margin-bottom: 0; text-align: right">2,261.7</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.25in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 10.8pt; padding-left: 10.8pt; font-size: 10pt; text-align: right">&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%">&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 2012, approximately
49.1% of our steel product sales represented SBQ steel products, of which we sold 37% to the auto part industry, 33% to service
centers, 1% for hand tools, 2% for mining equipment and the remaining 27% to other industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2012, direct sales to the automotive
industry decreased by 2% compared to 2011. In 2011, direct sales to the automotive industry decreased by 7% compared to 2010. In
2010, direct sales to the automotive industry increased by 40% compared to 2009. 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 and 2012
sales to the energy sector accounted 0.4% and 0.9%, respectively, 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 STYLE="font-weight: bold; padding-bottom: 1pt">&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, Canada and Other Countries</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="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 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">2012</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">2012</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">I-Beams&#9;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">95</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">97</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">96</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">5</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">3</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">4</TD><TD STYLE="text-align: left; width: 2%">%</TD></TR>
</TABLE>

<P STYLE="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" 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">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, Canada and Other Countries</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="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 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">2012</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">2012</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Channels&#9;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">59</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">55</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">50</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">41</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">45</TD><TD STYLE="text-align: left; width: 2%">%</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 5%">50</TD><TD STYLE="text-align: left; width: 2%">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Angles&#9;</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">75</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25</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">Hot-rolled bars (round, square and hexagonal rods)&#9;</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">29</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Rebar&#9;</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">97</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">4</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&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">Flat bar&#9;</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">78</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22</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">Cold drawn finished bars&#9;</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">46</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54</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 semi-finished trade products&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</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; text-indent: -0.1in; padding-left: 0.1in">Electro-Welded wire mesh&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&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">Wire rod&#9;</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">100</TD><TD STYLE="text-align: left">%</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&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">Electro-Welded wire mesh panel&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</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">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Other&#9;</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">37</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;&nbsp;&nbsp;</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><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">63</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Total (weighted average)&#9;</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">60</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><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">40</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in">During 2012, approximately 35% 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
65% of our sales by volume, with SBQ products representing approximately 22% 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&#8217; 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 2012 and 2011, 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">requirements. Customer orders are generally cancelable without
penalty prior to finishing size rolling and depending on customers&#8217; changing production schedules. Accordingly, we do not
believe that backlog is a significant factor in 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 &#8220;backhauling&#8221; 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&#8217;
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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Steel Mills), located in Pueblo, Colorado; Tamco Steel, located
in Rancho Cucamonga, California; and Grupo 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 2012 and 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 73,028 tons, or approximately 3.2%, and approximately 69,600 tons, or approximately
3%, of our total finished product sales in 2012 and 2011, respectively. The revenue that we derived from I-beam products represented
approximately 3% and 2.4% of our net sales in 2011 and 2012, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2012, we sold approximately 205,935
tons of I-beams, channels and angles at least three inches in width (including the 73,028 tons of I-beams described above) which
represented approximately 9% of our total finished product sales for the year. 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. We believe that the domestic competitors in the Mexican market for structural
steel are Altos Hornos de Mexico, S.A. de C.V. (&#8220;Ahmsa&#8221;), Sider&uacute;rgica del Golfo, S.A. de C.V. (a wholly-owned
subsidiary of Industrias CH), Aceros Corsa, S.A. de C.V. (&#8220;Corsa&#8221;) and Gerd&atilde;o, S.A. We estimate that our share
of Mexican production of structural steel was 49% in 2012 and 53% in 2011, according with information provided by the <I>C&aacute;mara
Nacional de la Industria y del Acero</I> (CANACERO).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2012, we sold approximately 1,165,632
tons of hot rolled and cold finished steel bars and 1,133,574 tons in 2011. 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 18% and 24%, respectively,
in 2012 and 16% and 53%, respectively, in 2011. Rebar and light structural steel together accounted for approximately 718,194 tons,
or 32%, of our total production of finished steel products in Mexico and the United States in 2012. 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. 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 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>


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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 2013 and will expire on March 11, 2016. 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">Five of the Republic Steel plants are
certified to ISO/TS 16949; Canton, Lorain, Lackawanna, Massillon and Hamilton. The plants in Gary and Solon are certified to ISO
9001. 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&#8217;s commitment to quality and customer focus. ISO 9001 is a set of international quality control standards for
management and practices.</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 except for the Solon plant. Through these certifications, Republic&#8217;s Environmental, Health
&amp; Safety Management System is structured upon training, communication, employee participation, document control, objective
and target setting, and management&#8217;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 OHSAS 18001 certification is
effective 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 increased approximately 34% in 2010, 21% in 2011 and
1% in 2012; and prices of ferroalloys increased approximately 22% in 2010 and 10% in 2011 and decreased approximately 10% in 2012.
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 2012, our cost of sales in Mexico,
as a percentage of sales in Mexico, was 79%, compared to our U.S. operations where our cost of sales, as a percentage of sales
in the United States, was 99%, 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>


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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 57% of our consolidated manufacturing conversion
cost in 2012 (64% of the manufacturing conversion cost in our Mexico operations and 47% of the manufacturing conversion cost in
our U.S. operations), compared to 56% of our 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). 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 9% and 16.6% of our refined scrap tonnage in 2012 and 2011, respectively, and (ii)
purchases from third party scrap processors in Mexico and the southwestern United States, which, in the aggregate, provided us
with approximately 88.1% and 2.9%, respectively, in 2012 and approximately 83% and 0.4%, respectively, in 2011 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 2010, 2011 and 2012, 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 2012, compared to 10% in 2011, and they accounted for 18% of our manufacturing conversion
cost in 2012, compared to 17% in 2011 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., Ferroatl&aacute;ntica de
M&eacute;xico, S.A. de C.V. and Oxbow Metales M&eacute;xico, S. de R.L 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, Missano, Luoyang Hong Feng Refractories and Abrasives,
Co., LTD and JCS Energoprom &#8211; Die &amp; From.</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., Fedmet Resources Corp., Vesuvius de M&eacute;xico, S.A. de C.V., Magnesita Refractories M&eacute;xico, S.A. de C.V., Puyang
Refractories Group Co., LTD, Magna Refractarios M&eacute;xico, S.A. de C.V. and Refratechnik.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Electricity</I>. In 2012 and 2011,
electricity accounted for approximately 8% of our consolidated manufacturing conversion cost for the period. Electricity accounted
for 10% of our manufacturing conversion cost in 2012 and 2011 in our Mexico facilities and is supplied by the <I>Comisi&oacute;n
Federal de Electricidad </I>(&#8220;CFE&#8221;). It accounted for 7% of the manufacturing conversion cost in 2012 and 6% in 2011
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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">volatile and subject to dramatic price increases in short
periods of time. In the late 1990s, the CFE began to charge for electricity usage 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
&#8220;combustoleo&#8221; 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 2% of our consolidated manufacturing conversion cost (2% of the manufacturing
conversion cost of our Mexican operations and 3% of the manufacturing conversion cost of our U.S. operations) in 2012, compared
to 3% in 2011 (3% 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&#8217;s-end.
As indicated in Note 5(t) to our consolidated financial statements as of and for the years ended December 31, 2012 and 2011, derivative
financial instruments are recognized in the statement of financial position 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 2012, 2011 and 2010, 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&#8217; equity under the caption fair value of derivative financial instruments until such
time as the related item in 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 IFRS 7 &#8220;Financial Instruments: Disclosures&#8221;.</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. &#8220;Risk Factors&#8212;Risk Factors
Related to our Business&#8212;In the event of environmental violations at our facilities we may incur significant liabilities&#8221;
and Item 8. &#8220;Financial Information&#8212;Legal Proceedings.&#8221;</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>discharges to the air, water and soil;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the handling and disposal of solid and hazardous wastes;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the investigation and remediation of contaminated soil, sediment and groundwater.</TD></TR></TABLE>


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<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 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&#8217; 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 (&#8220;MACT&#8221;) standard for Iron &amp; Steel Manufacturers,
because it does not emit hazardous air pollutants above the major source 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 the Lorain, Ohio plant will be subject to the MACT standard for Industrial, Commercial and Institutional
Boilers and Process Heaters. Once effective, this may cause us to incur additional costs at this facility in order to come into
compliance. Our Canton, Ohio facility is subject to the MACT standard for Electric Arc Furnaces as an &#8220;area source.&#8221;
Revisions of this standard are under development and, when promulgated, may impose additional restrictions on our Canton operations
including those relating to mercury emissions and control.</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&#8217;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&#8217;s federal government is also considering various approaches for reducing greenhouse gas emissions,
although we do not presently believe Republic&#8217;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 these negotiations or whether any of the
countries in which we operate will sign on to any resulting agreement is unknown. More stringent GHG 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 (&#8220;ACMs&#8221;).
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 within the next two years. 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.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">More stringent standards for particulate matter have been
promulgated 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 new or modified sources at our U.S. facilities in
2014 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 &#8220;LGEEPA&#8221;) 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 &#8220;SEMARNAT&#8221;) and enforced by the Ministry&#8217;s enforcement branch, the Federal Attorney&#8217;s Office for
the Protection of the Environment (<I>Procuradur&iacute;a Federal de Protecci&oacute;n al Ambiente </I>or <I>&#8220;</I>PROFEPA&#8221;);
(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 &#8220;Law on Wastes&#8221;), 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">owners and lessors may have against the contaminating party,
and aside from the criminal or administrative liability 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>


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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&#8217;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 &#8220;DGN&#8221;),
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&#8217;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 &#8220;MEFTA&#8221;, 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 &#8220;Association&#8221;)</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>


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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><IMG SRC="flowchart.gif" ALT=""></P>

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

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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>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.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">&nbsp;</TD><TD>(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.
(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%), Corporaci&oacute;n ASL, S.A. de C.V. (99.99%) and Simec International 5, Inc. (100%).</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 were operated by Simec
International 6, S.A. de C.V. until October 31, 2012 (began operations in November 2010). Since November 1, 2012 these facilities
are operated by Orge, S.A. de C.V. (incorporated in October, 2012).</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>

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<TD STYLE="width: 0; text-align: right"></TD><TD STYLE="width: 0.25in">(5)</TD><TD>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%) (merged into Aceros DM, S.A. de C.V. in 2012), 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%).</TD>
</TR></TABLE>



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

<P STYLE="margin: 0"></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="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 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
        Interest (%)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Undershaft Investments, N.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cura&ccedil;ao</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pacific Steel, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SimRep Corporation and subsidiaries (Republic)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">50.22%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Coordinadora de Servicios Sider&uacute;rgicos de Calidad, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Comercializadora Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Industrias del Acero y del Alambre, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Procesadora Mexicali, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Servicios Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sistemas de Transporte de Baja California, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operadora de Metales, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operadora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operadora de Servicios de la Industria Sider&uacute;rgica ICH, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Arrendadora Simec S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">CSG Comercial, S.A. de C.V</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.95%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Comercializadora de Productos de Acero de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.95%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sider&uacute;rgica de Baja California, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.95%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Corporaci&oacute;n Aceros DM, S.A. de C.V. and subsidiaries</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Comercializadora MSAN, S.A de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 2, Inc. (merged into Simec Steel, Inc. in 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.A.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 3, Inc. (merged into Simec Steel, Inc. in 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.A.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 4, Inc. (merged into Simec Steel, Inc. in 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.A.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 5, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.A.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Corporaci&oacute;n ASL, S.A. de C.V. </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 6, S. A. de C. V. </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>
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<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 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
        Interest (%)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 64%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 7, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec Acero, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec USA, Corp.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pacific Steel Projects, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec Steel, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Corporativos G&amp;DL, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">GV do Brasil Industria e Comercio de A&ccedil;o LTDA.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Orge, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 12pt; 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>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, 2012, 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 3.8 million tons of rolling
and finishing capacity, of which 1.8 million are located in Mexico, and 2 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
own an integrated blast furnace in Lorain, Ohio and a rolling mill in Lackawanna New York. Processing mills are located in Massillon
Ohio, Hamilton Ontario, Gary Indiana and Solon Ohio.</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. Our facility in Canton, Ohio is capable of producing billets and 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"></P>

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<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">Production Volume and Capacity Utilization</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">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">2012</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center">(tons in thousands)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt">Melt shops</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: 46%; text-align: left; text-indent: -0.1in; padding-left: 0.2in">Steel billet production&#9;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,458.3</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">2,495.0</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">2,562.4</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">Annual installed capacity<SUP>(1)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,532.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,797.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,797.2</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: 0.2in">Effective capacity utilization&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54.2%</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52.0%</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53.4%</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt">Rolling mills</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: 0.2in">Total production&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,354.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,440.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,462.4</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: 0.2in">Annual installed capacity<SUP>(1)</SUP>&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,521.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,757.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,790.5</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">Effective capacity utilization&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66.8%</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64.9%</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">65.0%</TD><TD STYLE="text-align: left"></TD></TR>
</TABLE>

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

<!-- 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%">&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">(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 2012.</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: 10pt 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; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Production %)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">I Beams&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">21.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.3%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Channels&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.6%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.2%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.5%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Angles&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25.4%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24.1%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.7%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.3%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hot rolled bars (round, square And hexagonal rods)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">22.4%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">46.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.1%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.2%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">46.4%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.6%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">84.2%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">42.6%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Flat bars&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.5%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.6%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cold finished Bars&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">21.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.2%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Electro-Welded Wire mesh&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.4%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.3%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Wire rod&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.6%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.5%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Electro-Welded Wire mesh panel&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.8%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.8%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other&#9;</FONT></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">0.8%</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">3.9%</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">0.8%</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">2.9%</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">1.7%</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.0%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.0%</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 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</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: 0pt 0pt 12pt">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 2012, the Guadalajara mini-mill produced
317,654 tons of steel billet and 350,721 tons of finished product, operating at 91% capacity for billet production and 73% capacity
for finished product production. The Guadalajara rolling facilities process billet production from our 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="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">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">2012</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)&#9;</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><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">353</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;9,069</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;10,809</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;11,357</FONT></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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,372</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,070</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,749</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
2012, the Mexicali mini-mill produced approximately 271,549 tons of billet, of which the Guadalajara mini-mill used 55,485
tons. In 2012, the Mexicali mini-mill produced 171,154 tons of finished products. In 2012 we operated the Mexicali mini-mill
at 63% capacity for billet production and at 68% 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 2012, 46% of the products produced at the Mexicali mini-mill were
rebar, 24% were angles, 5% were hot rolled bars (round, square and hexagonal rods) and the remaining 25% 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="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">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">2012</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)&#9;</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><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">186</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;9,090</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;10,072</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;10,527</FONT></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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,283</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,765</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,895</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</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: 0pt 0pt 12pt">480,000 tons. In 2012,
the Apizaco mini-mill produced 468,895 tons of steel billet, of which the Guadalajara mini-mill used 12,572 tons. In 2012 the Apizaco
mini-mill produced 403,164 tons of finished products. In 2012 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 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 78,000 tons. In 2012, the Cholula facility produced 78,290 tons of finished products, at 100% 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 2012, 13% of the products we produced
at the Apizaco and Cholula facilities were rebar, 47% were hot rolled bars (round, square and hexagonals) and the remaining 40%
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="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">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">2012</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)&#9;</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><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">376</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;10,651</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;11,942</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;12,479</FONT></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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,037</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&#9;</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><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></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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,033</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, 2012,
these facilities had an annual installed capacity of 860,000 tons of billet and 620,000 tons of finished product. In 2012, the
San Luis facilities produced 594,804 tons of steel billet, of which the Guadalajara mini-mill used 6,300 tons. In 2012 the San
Luis facilities produced 557,624 tons of finished product, operating at 69% capacity for billet production and 90% capacity for
finished product production. Our San Luis facilities mainly produces rebar, light structurals and wire rod. In 2012, 84% of the
products produced at the San Luis facilities were rebar, 4% wire rod, and the remaining 12% 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="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">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">2012</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)&#9;</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><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">560</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;8,164</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;10,133</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;10,438</FONT></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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,434</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,390</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,604</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, 2012, these facilities
had an annual installed capacity of 2,647,000 tons of billet and 1,960,000 tons of finished product. In 2012, Republic facilities
produced 909,523 tons of steel billet. For the same period, Republic facilities produced 699,258 tons of hot-rolled bars. Republic
facilities produced 136,245 tons of cold finish bars. In 2012, Republic facilities produced 144,216 tons of wire 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">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">2012</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)&#9;</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><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">787</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;14,146</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;16,050</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Ps.&#9;16,544</FONT></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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,212</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</FONT></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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,787</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</FONT></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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,016</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
operates an integrated steel mill, it has a 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, 2012, an annual installed capacity of 1,264,000 tons of steel billet and 838,000 tons of finished product. During 2012, the
Lorain facility operated at 28.9% of capacity for 9-10&rdquo; rolling mill and 36.6% of capacity for 20&rdquo; mill finishing and
shipping production, and it produced 271,312 tons of finished products. The facility did not produce any steel billets in 2012.</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 220-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 line to inspect finished bar
produced in Lackawanna and Lorain. As of December 2012, the Canton facility had annual installed capacity of 1,383,000 tons of
steel billet. In 2012, this facility produced 909,523 tons of blooms, billets and other semi-finished trade product and was operated
at 65.7% 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 16 conventional
stand mill with a 5 stand sizing mill and two saw lines capable of producing rounds, squares, and hexagons in both cut length and
coils. This facility produces hot rolled bar sizes that range from .758&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, 2012, the Lackawanna facility had annual installed capacity
of 599,000 tons of hot rolled bars. In 2012, this facility produced 427,946 tons of hot rolled bars and was operated at 71.5% 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, 2012, an annual installed
capacity of 125,000 tons of finished product. During 2012, the Massillon facility was operated at 55.5% capacity of finished product
and produced 69,521 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. </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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">As
of December 31, 2012, the Gary facility had annual installed capacity of 71,000 tons of cold finished bars. In 2012, this
facility produced 39,448 tons of cold finished bars and was operated at 55.7% 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, 2012, the Solon and Memphis facilities had installed capacities of 181,000, and 87,000 tons, respectively, for wire
products. During 2012, the Solon facility produced and shipped 144,216 tons of wire products and was operated at 79.5% capacity
of finished product.&nbsp; No wire products were produced at the Memphis facility during 2012.</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, 2012, the Hamilton facility had annual installed
capacity of 59,000 tons of cold finished bars. In 2012, this facility produced 27,276 tons of cold finished bars and was operated
at 46.3% 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>2012 Annual
        Production Volume (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 Annual Installed Capacity (tons)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Structurals (47%); Light structurals (14%); SBQ (33%), Rebar (6%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace with continuous caster rolling mill and bar processing lines</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">350,721</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">480,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexicali</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Structurals (22%); Rebar (46%); Light structurals (32%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace with continuous caster and bar rolling mills</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">171,154</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">250,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Apizaco and Cholula</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (84%); Rebar (13%); Light structurals (3%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace with vacuum tank degasser, continuous caster, bar rolling mills, cold drawn and bar turning equipment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">403,164</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">480,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Aceros DM, San Luis Potos&iacute;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar (78%), Light structurals (5%), Wire rod (5%), Electro-Welded wire mesh (5%), Electro-Welded wire mesh panel (7%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">three electric arc furnaces, two continuous casters, two reheating furnaces, rebar rolling mill and wire rod rolling mills</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">388,047</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">400,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Aceros San Luis, San Luis Potos&iacute;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace, continuous caster, reheating furnace and rebar rolling mill</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">169,577</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">220,000</FONT></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="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>2012 Annual
        Production Volume (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 Annual Installed Capacity (tons)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lorain(1)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif">blast furnace, vacuum tank degasser, continuous caster, bar and wire rod rolling mills</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif">271,312</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif">838,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Canton(2)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace, vacuum tank degasser, continuous caster</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">909,523</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,383,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lackawanna</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">reheat furnace, bar and wire rod rolling mills</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">427,946</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">599,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Massillon</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">cold drawn bar turning and heat treating equipment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">69,521</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">125,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gary</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">cold drawn bar turning and heat treating equipment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">39,448</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">71,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Solon and Memphis (acquired in February, 2011)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cold Heading Quality (CHQ) wire products (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">machinery and equipment to clean and coat, draw, and anneal wire </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">144,216</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">269,000</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hamilton</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">cold drawn bar turning and heat treating equipment</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">27,276</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">59,000</FONT></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>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 6pt; margin-left: 0pt; text-indent: 0pt"><A NAME="a_007"></A><FONT STYLE="color: #010000">Item
5.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></FONT>Operating and Financial Review and
Prospects</P>

<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 consolidated 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: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<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 National Banking and Securities
Commission (CNBV) has established the requirement that listed companies must disclose their financial information to the public,
through the Mexican Stock Exchange (BMV), and therefore, beginning in 2012, we prepare our financial information in accordance
with IFRS, issued by the IASB. IFRS 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. We applied IFRS
1, <I>Initial Adoption of International Financial Reporting Standards</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Our Financial Statements for the year ending December 31, 2012 are
the first annual financial statements presented in accordance with IFRS. The translation date is January 1, 2011 and therefore,
the year ended December 31, 2011 is the comparative period covered by the standard of adoption IFRS 1, &ldquo;Initial Adoption
of International Financial Reporting Standards&rdquo;. According to IFRS 1 we will apply the relevant mandatory exceptions and
certain optional exemption to retroactive application of IFRS. The reconciliation and description of the effects of the transition
into IFRS are explained in Note 28 of our consolidated financial statements. We applied the following mandatory exceptions with
respect to the retroactive application of IFRS:</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: 35.45pt"></TD><TD STYLE="width: 14.2pt">-</TD><TD><B><I>Accounting estimates</I></B> &ndash; Accounting estimates made under MFRS in 2011 are consistent with estimates under
IFRS made for the same periods and are thus, not retrospectively modified, except for the fixed asset componentization as explained
in Note 28 to our consolidated financial statements included elsewhere herein.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&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: 35.45pt"></TD><TD STYLE="width: 14.2pt">-</TD><TD><B><I>Hedging instruments - </I></B>Certain hedging instruments that were designated as hedges under MFRS qualify for hedge
accounting under IAS 39, Financial Instruments: Recognition and Measurement. No designations of hedging relationships were made
retrospectively.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt"><B><I>&nbsp;</I></B></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: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">Other mandatory exceptions were not applicable to us.</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 0 0 28.35pt">Additionally, we have applied the option for first-time
adoption exemptions as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected not to apply IFRS 3, Business Combinations (as revised in 2008) retrospectively to
prior business combinations that occurred before its date of transition to IFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected to present the items of property, plant and equipment at their net book value under
MFRS at the transition date, which represents the depreciated cost adjusted for price changes of a specific index (deemed cost).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected to recognize all cumulative unrecognized actuarial gains and losses at the date of
transition to IFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 78pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We elected to reset to zero the balance of cumulative translation adjustment of foreign subsidiaries
at the date of transition.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-size: 10pt">-</FONT></TD><TD><FONT STYLE="font-size: 10pt">We applied the transitional provisions set out in paragraphs 27 and 28 of IAS 23, Borrowing Costs.
Therefore, we designated the transition date to IFRS as the commencement date for capitalization of borrowing costs relating all
qualifying assets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49.65pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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, 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, compared to 2009, was of 34%. Our net revenue from sales decreased in 2011,
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, compared to 2010, was 16%. Our net revenue
from sales decreased in 2012, compared to 2011, increased by 1% in the automotive sector, increased 20% in the independent distributor
sector, decreased 55% in the hand tools sector, decreased 53% in the mining sector and decreased 20% in other industries. The
total decrease in net revenue from sales of SBQ products in 2012, compared to 2011, was 4%.</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 2010, 2011 and 2012 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">Sales Volume, Price and Cost Data,
2011 - 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="text-align: center">&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">Year 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">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">2012</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Shipments (thousands of tons)&#9;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">2,289</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">2,262</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">539</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">376</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">560</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">787</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales (Ps. millions)&#9;</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">29,524</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,967</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,692</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,845</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,020</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></TR>
</TABLE>


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<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="text-align: center">&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">Year 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">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">2012</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in; width: 56%">Cost of sales (Ps. millions)&#9;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">25,563</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">25,960</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: 0.2in">Guadalajara and Mexicali&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,866</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,116</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,344</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,568</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,625</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,932</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average price per ton (Ps.)&#9;</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">13,052</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,071</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,479</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,438</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,544</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Average cost per ton (Ps.)&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,168</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,477</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,492</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,894</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&#9;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,157</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,483</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,432</TD><TD STYLE="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></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">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 2012 and increased 3.9% in 2011. The U.S. GDP increased 2.2% in 2012 and increased 1.7% in 2011. 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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% compared to 2009. The average steel price increased approximately 17% in 2011 compared to 2010.
The average steel price increased approximately 2% in 2012 compared to 2011.</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, 2011 and 2012, 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">Steel imports to the United States accounted
for an estimated 24% of the domestic U.S. steel market in 2012 and an estimated 22% in 2011. 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. </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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">For
example, prices of scrap metal increased approximately 34% in 2010, increased approximately 21% in 2011 and increased
approximately 1% in 2012; and prices of ferroalloys increased approximately 22% in 2010 and 10% in 2011 and decreased
approximately 10% in 2012. As with other raw materials, iron ore and coke prices fluctuate significantly. However, in 2010,
2011 and 2012 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 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 in response to the financial crisis, they have remained
highly volatile. Prices for electricity increased approximately 8% in 2010, 11% in 2011 and 3% in 2012; and prices for natural
gas decreased approximately 18% in 2010, 14% in 2011 and 32% in 2012.</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 4.4% for 2010 3.8% for 2011
and 3.6% for 2012. 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. 12.13 per US$1.00 at April 30, 2013.</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">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 IFRS 8 Operating Segments: 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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="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, 2012</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">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="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="15" STYLE="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&#9;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">16,524,598</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">13,019,924</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">(20,555</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">29,523,967</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&#9;</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">13,049,147</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">12,931,572</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">(20,555</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">25,960,164</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,475,451</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,352</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,563,803</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">Administrative expenses&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">850,205</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">378,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,228,322</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">156,570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,659</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">181,229</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">Interest income&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,344</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,594</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">Interest expense&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,505</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,284</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,025</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 loss, net&#9;</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">(509,149</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">(750</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;&nbsp;&nbsp;</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">509,899</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,288,207</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(284,111</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,284</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,007,380</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&#9;</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">109,686</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">(56,054</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;&nbsp;&nbsp;</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">53,622</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)&#9;</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">2,178,521</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">(228,057</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">3,284</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">1,953,748</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">Depreciation and Amortization&#9;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">750,888</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">261,134</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;&nbsp;&nbsp;</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">1,012,022</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">Total Assets&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,588,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,288,629</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,420,511</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,456,785</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,649,409</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,560,505</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,420,511</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,789,403</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">937,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">366,213</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,303,974</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="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="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="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="15" STYLE="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&#9;</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&#9;</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">11,964,761</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">13,630,778</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">25,563,488</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,210,161</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">496,849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,707,010</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">Administrative expenses&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">718,392</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">331,561</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,049,953</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: 0.1in">Other expense, net&#9;</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;&nbsp;&nbsp;</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">Interest income&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,089</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,135</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">Interest expense&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,502</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,223</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,725</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&#9;</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;&nbsp;&nbsp;</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;&nbsp;&nbsp;</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 before income tax&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,986,316</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,075</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,127,391</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&#9;</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">182,027</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;&nbsp;&nbsp;</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">148,830</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&#9;</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">2,804,289</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">174,272</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;&nbsp;&nbsp;</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">2,978,561</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">Depreciation and Amortization&#9;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">731,678</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">217,838</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;&nbsp;&nbsp;</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">949,516</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">Total Assets&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,353,289</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,092,150</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">31,119,051</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,472,301</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">6,987,599</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&#9;</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;&nbsp;&nbsp;</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>
</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; text-indent: 35.45pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">Our net sales by product during 2012 and 2011
are as follows:</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: top">
    <TD STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SALES BY PRODUCT</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(in thousands of pesos)</P></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 46%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 27%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2012</FONT></TD>
    <TD STYLE="width: 27%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Light structurals&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,119,824</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">988,808</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Structurals&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,091,040</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,061,210</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bars&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,507,091</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,892,768</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,557,581</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,350,784</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Flat bar&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">715,994</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">614,662</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hot rolled bars&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,526,773</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,165,621</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cold drawn bars&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,678,059</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,375,967</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,327,605</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,820,678</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -5.25pt; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">29,523,967</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">29,270,498</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">&nbsp;</P>

<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
2012 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 COLSPAN="9" STYLE="font-weight: bold; text-align: center">SALES <BR>(in thousands of pesos)</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">2012</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 COLSPAN="9" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; text-indent: -0.1in; padding-left: 0.1in">Mexico&#9;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">15,749,895</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">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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,577,226</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">795,929</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">366,123</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)&#9;</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">34,794</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&#9;</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">29,523,967</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, 2011 and 2012</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 1%, to Ps. 29,524
million in 2012 compared to Ps. 29,270 million in 2011. This increase resulted principally from a 2% increase in the average price
per ton of steel products. Total sales outside of Mexico decreased 7%, to Ps. 13,774 million in 2012 compared with Ps. 14,871 million
in the same period of 2011. Total sales in Mexico increased 9%, from Ps. 14,399 million in 2011 to Ps. 15,750 million in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
decreased 1%, to 2.262 million tons in 2012, compared to 2.289 million tons in 2011. Total sales volume outside of Mexico of finished
steel products was 0.905 million tons in 2012, compared to 1.014 million tons in 2011, while total Mexican sales increased 6%,
from 1.275 million tons in 2011, compared to 1.357 million tons in 2012.</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
2% in 2012 compared to 2011, 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 1.5%, from
Ps. 25,563 million in 2011 to Ps. 25,960 million in 2012, which increase is mainly attributable to (i) an 5% increase in the average
cost of raw materials used to produce finished</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">steel
products in our Mexican operations; (ii) higher SBQ sales in our Mexican operations; and (iii) a 6% increase in shipments in our
Mexican operations. Cost of sales as a percentage of net sales was 88% in 2012, compared to 87% in 2011. 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.$2.1 and U.S.$1.8 per hour in 2012 and 2011, respectively, compared to U.S.$47.4 and U.S.$46
per hour for 2012 and 2011, 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 decreased 4%, to Ps.
3,564 million in 2012 compared to Ps. 3,707 million in 2011. This decrease attributable mainly to a decrease of approximately 11%
of volumes shipped in our operations in Republic. As a percentage of net sales, our gross profit was 12% in 2012, compared to 13%
in 2011.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our administrative expenses (including
depreciation and amortization) increased 17%, to Ps. 1,228 million in 2012, compared to Ps. 1,050 million in 2011. In 2012 and
2011, our general and administrative expenses included Ps. 297 million and Ps. 354 million, respectively, of amortization of the
tangible and intangible assets registered principally 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 2012 and 2011. Depreciation and amortization expense were Ps. 475 million in 2012 compared to Ps. 455 million
in 2011.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other Income (Expense), Net</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.
181 million in 2012, reflecting (i) an income of ps. 216 million related to compensation from litigation settlement received by
missing inventory from the acquisition of Grupo San; (ii) expenses of Ps. 8 million corresponding to land remediation work at Pacific
Steel (iii) an expense of Ps. 68 million related to the depuration of some account balances and (iv) other income 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 expenses, net of Ps.
114 million in 2011, reflecting (i) an expense of Ps. 49 million related to the depuration of some account balances; (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: 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">Interest Income</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 35.45pt"><FONT STYLE="font-style: normal">We recorded
an interest income of Ps. 23 million in 2012 compared to Ps. 26 million in 2011.</FONT></P>

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

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 35.45pt"><FONT STYLE="font-style: normal">We recorded
an interest expense of Ps. 23 million in 2012 compared to Ps. 24 million in 2011.</FONT></P>

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

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 35.45pt"><FONT STYLE="font-style: normal">We
recorded a foreign exchange loss of Ps. 509 million in 2012 compared to an exchange gain of Ps. 582 million in 2011; this foreign
exchange loss reflected the 7% appreciation of the peso against the dollar in 2012 and the 13% devaluation of the peso against
the dollar in 2011. Foreign exchange loss in 2012 resulted because our monetary position in dollar assets is greater than our liabilities
in dollars. </FONT></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 2012 we recorded an income tax provision
of Ps. 54 million, which included an income tax benefit of Ps. 16 million and an income tax provision for deferred income taxes
and deferred Flat-Rate Business Tax (FRBT) of Ps. 70 million. In 2011 we recorded an income tax provision of Ps. 149 million which
included an income tax benefit of Ps. 87 million and an income tax provision for deferred income taxes and deferred FRBT of Ps.
236 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 2012
and 2011 were 2.7% and 4.8%, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">According to the Income Tax Law in M&eacute;xico,
the tax rate for the year 2013 is 30%, 29% for 2014 and 28% for 2015 and thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The 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 acquisitions
of inventory and fixed assets and certain 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 years ended December 31, 2012 and 2011
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">Net Income</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded net income of Ps. 1,954 million
in 2012, compared to net income of Ps. 2,978 million in 2011. This decrease is mainly attributable to (i) a foreign exchange loss
of Ps. 509 million in 2012 compared to Ps. 582 million of exchange gain in 2011 (ii) an increase in cost of sales and (iv) an increase
in administrative expenses.</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 consolidated financial statements, which have been prepared in accordance with IFRS. 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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 operating tax losses (NOL) carry forwards,
and only for those who have probability of being recovered is determined a deferred tax asset. 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. 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 flows 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 estimated 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 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our history of earnings;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our history of capital expenditures;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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">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, 2011 and 2012 there was not impairment charge to other intangible assets.</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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">assumptions
used in the valuation model. As of December 31, 2011 and 2012, 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, 2012, the main key
assumptions used in the valuation models of San Luis reporting unit are as follows:</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>discount rate: 12%; 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: 35.5pt"></TD><TD STYLE="width: 18pt"><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 and billet.
The company forecast an increase of 37% in 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 only the increase in sales prices proportional to the
estimated inflation.</TD></TR></TABLE>

<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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>discount rate: 10.9%; 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: 35.5pt"></TD><TD STYLE="width: 18pt"><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">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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Net realizable value of inventory. We
apply judgment at each balance sheet date to determine whether the low moving inventory is impaired. Inventory is impaired when
the carrying value is greater than the net realizable value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Reserve for environmental liabilities:
The reserve for environmental liabilities represent the estimated environmental remediation costs associated that we believe are
going to incur. These estimates are based on currently available data, existing technology, the current laws and regulations and
take into account the likely effects of inflation and other economic and social factors. The time in which they could incur these
costs cannot be determined reliably at this time due to the absence of deadlines for remediation under the laws and regulations
which apply to remediation costs will be made.</P>

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

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

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<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 81%; padding-right: 5.4pt; padding-left: 15.85pt; text-align: justify; text-indent: -13pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Effective for annual periods beginning on or after</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-align: justify; text-indent: -13pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IFRS 9, Financial Instruments</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IFRS 10, Consolidated Financial Statements</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IFRS 11, Joint Arrangements</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
</TABLE>

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

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<P STYLE="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="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt; width: 81%">IFRS 12, Disclosure of Interest in Other Entities</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 19%">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IFRS 13, Fair Value Measurement</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IAS 27, Consolidated and Separate Financial Statements - Reissued as IAS 27 Separate financial statements (as amended in 2011)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IAS 28, Investments in Associates &ndash; Reissued as IAS 28 Investment in associates and joint ventures (as amended in 2011)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">Amendment to IFRS 7 Disclosures &ndash; Transfers of Financial Assets</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">Amendment to IFRS 9 and IFRS 7 Mandatory effective date of IFRS 9 and Transition Disclosures</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2015</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">Amendments to IFRS 10, IFRS 11 e IFRS 12, Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">IAS 19 (as revised in 2011), Employee Benefits</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">Amendment to IAS 32 Offsetting Financial Assets and Financial Liabilities</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2014</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 1.7pt; text-align: justify; text-indent: -1.7pt">Amendments to IFRSs, Annual Improvements to IFRSs 2009-2011 Cycle Except for the Amendment to IAS 1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">January 1, 2013</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 0; text-align: justify; text-indent: 35.45pt">At the date
of issuance of these consolidated financial statements, we have not had any effect with these new standards on its financial information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 0; text-align: justify; text-indent: 35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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, 2010, 2011 and 2012,
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, 2012 and 2011, Republic had U.S.$50 million, outstanding
under this line of credit. See Note 20 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"></P>

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<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 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, 2010 we had cash and cash equivalents of Ps. 3,385 million, as of December 31, 2011 we had cash and cash equivalents
of Ps. 6,537 million and as of December 31, 2012 we had cash and cash equivalents of Ps. 8,102 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, to acquire businesses and, capital expenditure programs. The following is a summary of cash
flows for the two years ended December 31, 2011 and 2012:</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="7" 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">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">2012</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="7">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">Funds provided by operating activities&#9;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">2,954</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">3,655</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&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(440</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,507</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Funds used by financing activities&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(23</TD><TD STYLE="text-align: left">)</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></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. 3,655 million in 2012 compared to Ps. 2,954 million in 2011. The increase of Ps. 701 million in the net funds provided
by operation between 2012 and 2011 originated mainly from the net decrease in accounts receivable 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. 1,507 million in 2012 compared to Ps. 440 million in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our net funds used by financing activities
in 2012 were Ps. 23 million, compared to Ps. 0 million by financing activities in 2011. 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 15 to our 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, 2012, 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. (&quot;Concast&quot;) for the manufacture of the melt shop equipment to be used by our subsidiary
GV do Brazil Industria e Comercio of A&ccedil;o LTDA with a capacity of 520,000 tons of annual steel billet for the production
of rebar and wire production with an arc furnace of 65,000 tons. The purchase price was 15 million Euros, to be paid in dollars
at a fixed exchange rate of 1.3764 U.S. dollars per Euro in accordance with the following payment schedule:</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>70% on 5 payments within 15 days after the signing the contract and 10 months following.</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: 0"><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 remaining 30% by irrevocable letter of credit in favor of the supplier, which shall be valid for a minimum period of 18
months. This letter shall be payable in equal installments of 10% of the contract value which will start from the last shipment
of equipment to final testing and startup. This amount will be paid as follows:</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: 70.9pt"></TD><TD STYLE="width: 14.15pt">-</TD><TD>5%, 11.5 months after signing the contract.</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: 70.9pt"></TD><TD STYLE="width: 14.15pt">-</TD><TD>5% within a few weeks after notification of the supplier to the Company's bill of lading and / or airway and / or certificate
in the store that has received the equipment in good condition, however this partial payment of 5% may be paid in any event no
later than February 28, 2013.</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: 70.9pt"></TD><TD STYLE="width: 14.15pt">-</TD><TD>The remaining 20% will be paid by letter of credit irrevocable nontransferable, open until June 30, 2014, which shall be in
force until the date agreed and this 20% will be covered as follows:</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: 70.9pt"></TD><TD STYLE="width: 14.15pt">-</TD><TD>10% will be paid to the contractor upon delivery of documents of all operating units, but if the cold tests with respect to
any equipment operation cannot be completed and / or successful completion in 12 months from the date of delivery, then do not
pay until they are delivered successfully tested over a period of thirteen months.</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: 70.9pt"></TD><TD STYLE="width: 14.15pt">-</TD><TD>10% will be paid to the contractor upon delivery of documentation and conducting performance tests with respect to any operating
unit and if not successfully, the contractor will be responsible for performing this test to the end of the warranty period.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 35.45pt; text-indent: 0in">At December 31, 2012, payments
in advance totaled USD$15.5 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Supplier shall provide a guarantee
(Warranty Bond) of 10% for a period of 24 months from the last shipment.</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 14.2pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.9pt"></TD><TD STYLE="width: 14.4pt">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">We have made advances for US$4.4 million
at December 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On July 20, 2012 we entered to make an
amendment to the original contract, an added an acquisition of a box for the rolling mill, the purchase price was 0.5 million Euros,
to be paid in dollars at a fixed exchange of 1.23482 dollars per euro. The payments will be done on dollars in accordance with
the following payment schedule:</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>20% of the contract in advance and the vendor will provide a bank guarantee for this amount</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>60% of the contract at the time of good delivery</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>10% of the contract at the provisional acceptance, the delivery of a pro-forma invoice and the certificate of provisional acceptance</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>10% of the contract once accepted the equipment permanently</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 35.45pt; text-indent: 0in">We have made advances for US$0.1
million at December 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On August 21, 2012 the Company
entered into a contract with the supplier Russula, SA for an amount of US$ 5.4 million for the development of a treatment plant
wastewater for its subsidiary GV do Brasil Industria e Comercio of A&ccedil;o LTDA. This contract shall be payable as follows<FONT STYLE="color: #333333">:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">10% at 15 days after signing the contract.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">The 5% within 15 days after certification of basic engineering approval,
which will be issued by the subsidiary.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">10.65% on March 12, 2013.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">7% on April 15, 2013.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">The 5% within 15 days after certification of approval to engineering detail,
which will be issued by the subsidiary.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">The 19.35% upon delivery of the commercial invoice, packing list, certificate
of origin of the equipment and insurance and freight for the team's arrival at the port.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">The 13% upon delivery of the equipment at the port of Brazil.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">The 20% against proforma invoice delivery and acceptance of the provisional
certificate.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt">10% upon delivery of final acceptance certificate of the plant and the warranty.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At December 31, 2012 have made
payments in advance totaled US$&nbsp;0.8 million<FONT STYLE="color: #333333">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On August 30, 2012 the Company
entered into a contract with the provider Mochetti Gino Industrie Sollevamenti S.r.l. for an amount of US$&nbsp;4.1 million for
the development of two overhead cranes to its subsidiary GV do Brasil Industria e Comercio LTDA of Aco. Payments will be made as
follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="color: #333333">30% within 30 days after signing the contract.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="color: #333333">60% by credit card which will be issued within
2 months from the date of signing the contract and the letter of credit must have a minimum validity of 12 months.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="color: #333333">The remaining 10% will be paid upon delivery
of the proforma invoice and the final acceptance certificate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 35.45pt; text-indent: 0in">At December 31, 2012 have made
advances US$&nbsp;1.2 million.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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;. The trademark &ldquo;Grupo Simec&rdquo; is currently in process of registration at the IMPI. 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>

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<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 2013 net sales increased
6% compared to the fourth quarter 2012. Sales in tons of finished steel increased 2% in the first quarter 2013 compared with the
fourth quarter 2012. Prices of finished products sold in the first quarter 2013 increased approximately 3% compared to the fourth
quarter 2012</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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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, Times, Serif; 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, 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="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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Short-term debt obligations of related parties<SUP>(1)</SUP>&#9;</FONT></TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">662</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;&nbsp;&nbsp;</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;&nbsp;&nbsp;</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;&nbsp;&nbsp;</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">662</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&#9;</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;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</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 (see paragraph below)&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27</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">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.2in">Total&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">679</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27</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">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">707</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. 656 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. 4 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 2012, 2011 and 2010, the expenses for operating leases were U.S.$7.4 million, U.S.$5.4
million and U.S.$4.8 million, respectively. As of December 31, 2012, total future minimum lease payments under non-cancelable operating
leases are U.S.$1 million in 2013, U.S.$0.8 million in 2014, U.S.$0.7 million in 2015, U.S.$0.6 million in 2016 and U.S.$0.4 million
in 2017. At December 31, 2012 there are no additional obligations after 2017. As of December 31, 2012, the current purchase commitments
related to the new electric arc furnace in the plant of Lorain were U.S.$23.1 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 28, 2012 Republic entered
into a sale and purchase agreement with Proyectos Comerciales el Ninzi, S.A. de C.V. (Shareholder of ICH) to sell 261,000 short
tons of Coke (short ton equals 907.18474 kilos). Through this contract, the buyer is obliged to purchase those tons in a period
not exceeding two years, without liability if it did not acquire. The sale price will be US$ 450 per short ton, for a total of
US$ 117.4 million.</P>

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<TD STYLE="width: 0"><A NAME="a_008"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;6.</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>&nbsp;Directors,
Senior Management and Employees</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: #010000">A.</FONT></TD><TD>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 2013 general meeting of shareholders as proposed by Industrias CH. We expect
that Industrias CH will be in a position to 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>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our general strategy;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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 </TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol"></FONT></TD><TD>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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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">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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rufino Vigil Gonz&aacute;lez&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2001</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ra&uacute;l Arturo P&eacute;rez Trejo&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2003</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sergio Vigil Gonz&aacute;lez&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Luis Garc&iacute;a Lim&oacute;n&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Jos&eacute; Luis Rico Maciel&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2001</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rodolfo Garc&iacute;a G&oacute;mez de Parada&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2001</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gerardo Arturo Avenda&ntilde;o Guzm&aacute;n&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2001</FONT></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">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"></P>

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<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 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: 34%; 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</B></P></TD>
    <TD STYLE="width: 33%; 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>Position</B></P></TD>
    <TD STYLE="width: 33%; 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>Position<BR>
Held Since</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B></B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Luis Garc&iacute;a Lim&oacute;n</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief Executive Officer</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1982*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mario Moreno Cortez</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Coordinator of Finance</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2012</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Juan Jos&eacute; Acosta Mac&iacute;as</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief Operating Officer</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2004</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Marcos Maga&ntilde;a Rodarte</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief Sales Officer</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2001</FONT></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"><B><I>Mario Moreno Cortez. </I></B>Mr.
Moreno was born in 1968. He is currently our coordinator of Finance. From 1998 to 2010 he was our general accountant within the
main subsidiaries of Grupo Simec. Previously<B><I> </I></B>Mr. Moreno was working in various departments of the financial area
within certain of our principal subsidiaries.</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, Times, Serif; 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, 2012
and 2011, we paid no fees to our seven directors, and the aggregate compensation our executive officers earned was approximately
Ps. 39.6 million and Ps. 31.1 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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, Times, Serif; 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. Rodolfo Garc&iacute;a G&oacute;mez de Parada, the chairman of the audit and corporate practices
committee, was elected at our annual ordinary shareholders&rsquo; meeting held on April 8, 2013, and Gerardo Arturo Avenda&ntilde;o
Guzm&aacute;n and Ra&uacute;l Arturo P&eacute;rez Trejo 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">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, Times, Serif; 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">As of December 31, 2012, we had
5,086 employees (2,814 were employed at our Mexico facilities, of whom 1,576 were unionized, and 2,272 were employed at Republic
facilities, of whom 1,826 were unionized) compared to 4,686 employees as of December 31, 2011, (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). </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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">As
of December 31, 2010&nbsp;we had 4,361 employees (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).</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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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, 2014.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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, 2014.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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, 2014.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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, 2014.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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
facility: 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, 2014.</TD></TR></TABLE>

<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">Eighty percent of Republic&rsquo;s workers
are covered by a collective bargaining agreement with the United Steelworkers (USW). On March 29, 2012, the USW ratified a new
agreement that expires on August 15, 2016 (labor agreement).&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"><B>Steelworkers Pension Trust</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 0 12pt; text-indent: 0.5in">Republic participates in the Steelworkers
Pension Trust (SPT), a defined benefit multi-employer pension plan. The Company obligations to the plan are based upon fixed contribution
requirements. The Company contributes a fixed dollar amount of U.S.$1.68 per hour for each covered employee&rsquo;s contributory
hours, as defined under the plan.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Participation in a multi-employer pension
plan agreed to under terms of a collective bargaining agreement differs from a traditional qualified single employer defined benefit
pension plan. The SPT shares risks associated with the plan in the following respects:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">a.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Contributions to the SPT by the Company may be used to provide benefits to employees of other
participating employers;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">b.</FONT></TD><TD><FONT STYLE="font-size: 10pt">If a participating employer stops contributing to the SPT, the unfunded obligations of the plan
may be borne by the remaining participating employers;</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">c.</FONT></TD><TD><FONT STYLE="font-size: 10pt">If the Company chooses to stop participating in the SPT, the Company may be required to pay an
amount based on the underfunded status of the plan, referred to as a withdrawal liability.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On March 21, 2011, the Board of Trustees
of the SPT elected funding relief which has the effect of decreasing the amount of required minimum contributions in near-term
years, but will increase the minimum funding requirements during later plan years. As a result of the election of funding relief,
the SPT&rsquo;s zone funding under the Pension Protection Act may be impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition to the funding relief election,
the Board of Trustees also elected a special amortization rule, which allows the SPT to separately amortize investment losses incurred
during the SPT&rsquo;s December 31, 2008 plan year-end over a 29 year period, whereas they were previously required to be amortized
over a 15 year period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Republic&rsquo;s participation in the
SPT for annual periods ended December 31, 2012 and 2011, is outlined in the table below.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 12pt"><IMG SRC="image_002.gif" ALT="">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">The plan has not utilized any extended amortization
provisions that affect the calculation of zone status.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">Republic Steel has not been listed in the
plans&rsquo; Forms 5500 as providing more than five percent of the total contributions for any plan years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">There have been no significant changes that
affect the comparability of 2012 and 2011 contributions.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 14pt; text-indent: 0in"><FONT STYLE="font-weight: normal"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>VEBA Benefit Trust</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">The Company is required to make quarterly
contributions to the VEBA Benefit Trust as determined by the terms of the USW collective bargaining agreement. The VEBA Benefit
Trust is a welfare plan for USW retiree healthcare benefits, and is not a &ldquo;qualified&rdquo; plan under ERISA regulations.
During 2012, in accordance with terms of the new USW labor agreement, no quarterly contributions were required prior to the 4th
quarter of 2012. For the years ended December&nbsp;31, 2012 and 2011, the Company recorded expenses of U.S.$2.3 million and U.S.$8.5
million, respectively, related to this welfare plan. The Company recorded combined expenses of U.S.$8.1 million and U.S.$14.5 million
for the years ended December&nbsp;31, 2012 and 2011, 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-indent: 35.45pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>401(k) Plans</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">Republic has a defined contribution 401(k)
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 participant&rsquo;s age and service as of January&nbsp;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</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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% vested in both their and the Company&rsquo;s
matching 401(k) contributions. For the years ended December&nbsp;31, 2012 and 2011, the Company recorded expense of U.S.$2.3&nbsp;million
and U.S.$2.1&nbsp;million, respectively, related to this defined contribution retirement plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">Employees who are covered by the USW labor
agreement are eligible to participate in the defined contribution 401(k) 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">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Profit Sharing Plans and Incentive Compensation Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">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 each year, the contribution is 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 multiplied by 3.0%, and above U.S.$100.0&nbsp;million multiplied by 3.5%, less the previous payouts
during the year. For the years ended December 31, 2012 and 2011, the Company recorded expense of U.S.$0.07 million and U.S.$1.0
million, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">Republic has a profit sharing plan for all
salaried and nonunion hourly employees that is based upon achieving target Earnings Before Interest, Taxes, Depreciation, and Amortization.
Republic paid $0.2 million under this plan during 2012 and $0.3 million during 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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, 2012, Rufino Vigil Gonz&aacute;lez, the chairman
of our board of directors, owned, directly or indirectly, approximately 64% of Industrias CH.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_009"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;7.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>&nbsp;Major
Shareholders and Related Party Transactions</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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 8, 2013, we had 497,709,214
shares of series B common stock outstanding. 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 8, 2013.</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&#9;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; 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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tuber&iacute;as Procarsa, S.A. de C.V. <SUP>(1)</SUP>&#9;</FONT></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">&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>

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<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="text-align: left; padding-left: 5.4pt; width: 56%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Proyectos Comerciales el Ninzi, S.A. de C.V.<SUP>(2)</SUP>&#9;</FONT></TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">27,207,654</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">5.5</TD><TD STYLE="text-align: left; width: 1%">%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Aceros y Laminados Sigosa, S.A. de C.V. <SUP>(1)</SUP>&#9;</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Joist Estructuras S.A. de C.V. <SUP>(2)</SUP>&#9;</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Industrial de Herramientas CH, S.A. de C.V. <SUP>(2)</SUP>&#9;</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Compa&ntilde;&iacute;a Mexicana de Tubos, S.A. de C.V. <SUP>(2)</SUP>&#9;</FONT></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&#9;</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">Total&#9;</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">497,709,214</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">100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">At March 31, 2013, 487,002,922 series
B common shares were held in Mexico by approximately 305 shareholders who were record holders in Mexico and 17 were ADS record
holders in the United States. The ADS represent 10,706,292 common shares.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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 20 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 2010 these sales totaled Ps. 43 million, in 2011, these sales totaled
Ps. 31 million and in 2012 these sales totaled Ps. 181 million. In addition, in 2010, 2011 and 2012 we purchased Ps. 81 million,
Ps. 66 million and Ps. 113 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, pursuant to which Industrias CH provides administrative services to us and our subsidiaries. The term of the agreement is indefinite.
We make payments to Industrias CH on a monthly basis. Under the services agreement, in 2010 we paid Ps. 14 million, in 2011 we
paid Ps. 14 million and in 2012 we paid Ps. 16 million.</P>

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<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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_010"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;8.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;</FONT></FONT>Financial
Information</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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"></P>

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<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">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 12pt; 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, 2012, 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, 2012 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">The shipment of five trucks per day of
the land in PS is made in the presence of personnel of DTSC. At December 31, 2012 PS had already shipped 18,935 tons of material
to our plant in Mexicali.</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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">agreement
will be reached with the DTSC in respect of defining the cleanliness levels. The results range from US$0.8 million to US$1.7 million.
On such bases, the company created a provision for this contingency at December 31, 2002, of US$ 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">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. In 2011, the State of California eliminated all Community Development Committees.
As a result, there is no imminent risk of expropriation.</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,
2012 and 2011, we had a reserve to cover probable environmental liabilities totaling U.S.$3 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, 2012, the current and non-current portions, U.S.$2.3 million and U.S.$0.7 million, respectively,
of the environmental reserve are included in other accrued liabilities and accrued environmental liabilities, respectively, in
the accompanying consolidated statement of financial position. 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, Times, Serif; 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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_011"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;9.</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>&nbsp;The
Offer and Listing</TD></TR></TABLE>

<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"></P>

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<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 CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP 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>Mexican
        Stock Exchange</B></P></TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP 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>New York
        Stock Exchange</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 75%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 5%; 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>High</B></P></TD>
    <TD STYLE="width: 5%; 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>Low</B></P></TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 5%; 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>High</B></P></TD>
    <TD STYLE="width: 5%; 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>Low</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2008</B>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">63.60</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.50</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.48</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.21</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2009</B>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">38.64</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.52</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.24</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.94</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2010</B>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">37.80</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">28.20</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.08</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.49</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2011</B>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">35.00</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25.16</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.85</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.53</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2012</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">61.99</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">31.00</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.39</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.96</FONT></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; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2011</B>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">First Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">35.00</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">29.95</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.85</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.13</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Second Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">34.39</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">29.20</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.80</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Third Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">30.41</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25.26</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.84</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.53</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fourth Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">34.09</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25.16</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.43</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.62</FONT></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; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2012</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">First Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">40.99</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">31.00</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.74</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.96</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Second Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">45.00</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">38.01</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.50</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.24</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Third Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">52.89</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">41.22</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.49</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.17</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fourth Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">61.99</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">49.14</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.39</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.23</FONT></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; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2013</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">First Quarter&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">64.62</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">51.00</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.37</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.15</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Second Quarter (through April 30)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">58.66</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">54.14</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.53</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.71</FONT></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; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2013</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">January&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">63.80</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">59.05</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.22</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.01</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">February&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">64.62</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">53.79</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.37</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.59</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">March&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">59.00</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">51.00</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.42</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.15</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">April </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">58.66</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">54.14</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.53</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.71</FONT></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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>non-disclosure of material events; or</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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"></P>

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<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 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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_012"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;10.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>&nbsp;Additional
Information</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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, Times, Serif; 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our dissolution or liquidation;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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"></P>

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<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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>voluntary dissolution of the company;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>change in corporate purpose or nationality;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>any transformation, merger or spin-off involving the company;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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"></P>

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<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 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, (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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the acquisition must be carried out through the Mexican Stock Exchange;</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

<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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

<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: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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"></P>

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<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, 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

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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: 35.5pt"></TD><TD STYLE="width: 18pt"><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>/<FONT STYLE="font-size: 7pt">3</FONT>%
                                                                                                           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 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"></P>

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<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">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, Times, Serif; 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, Times, Serif; 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, Times, Serif; 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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
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 42.86% for 2011,
2012 and 2013. The corporate-level dividend tax on 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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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, 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 2011, 2012 and 2013, 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">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 2011 or our 2012 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">circumstances
generally would be subject to Mexican tax at a rate of 28% for the year ended December 31, 2009 and 30% by 2010, 2011, 2012 and
2013 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">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, Times, Serif; 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, Times, Serif; 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>

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<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.
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, Times, Serif; 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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_013"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;11.</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>&nbsp;Quantitative
and Qualitative Disclosures About Market Risk</TD></TR></TABLE>

<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 97% 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 15 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, 2012 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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 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. 65.3 million (U.S.$5 million).</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, 2012 and assuming that the hypothetical market rate changes selected by us
in our market risk analysis occur during 2013. 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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_014"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;12.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;</FONT></FONT>Description
of Securities Other than Equity Securities</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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, Times, Serif; 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, Times, Serif; 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, Times, Serif; 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>

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<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 STYLE="font-family: Times New Roman, Times, Serif"><B>Depositary service</B></FONT></TD>
    <TD STYLE="width: 42%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Fee payable by ADR holders</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Issuance and delivery of ADSs, including issuances resulting from a distribution of shares or rights or other property </FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Up to US$ 5.00 per 100 ADSs (or portion thereof) </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Up to US$ 5.00 per 100 ADSs (or portion thereof)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">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 issuance of ADSs</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Registration for the transfer of shares</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Registration or transfer fees that may from time to time be in effect</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash distribution fees</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">US$.02 or less per ADS</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depositary services</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">US$.02 or less per ADS</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 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 2012 or 2011.</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"><A NAME="a_015"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; color: #010000">PART
II</FONT>&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_016"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;13.</FONT>&nbsp;&nbsp;</TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;Defaults, Dividends Arrearages
and Delinquencies</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">None.</P>

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<TD STYLE="width: 0"><A NAME="a_017"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;14.</FONT>&nbsp;&nbsp;</TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;Material Modifications
to the Rights of Security Holders and Use of Proceeds</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" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_018"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;15.</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;&nbsp;Controls and Procedures</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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
International Financial Reporting Standards. 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, 2012 has been audited by BDO and by Marcelo de los Santos S.C., a practice member of
Moore Stephens, independent registered public accounting firms, 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, 2012. 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 financing reporting were not effective at December
31, 2012.</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,
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 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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" 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 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.</TD></TR></TABLE>

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

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

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2012</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="font-style: normal">In
our assessment of our internal controls over financial reporting for the year ended December 31, 2012, the following material weaknesses
were identified by us:</FONT></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) failure to keep all our policies and procedures, including IFRS accounting policies,
updated; (ii) limited IFRS understanding within our Internal Audit department; (iii) inadequate controls in the review and approval
process of the disclosures of our financial statements; (iv) poor maintenance of our whistleblower line for the Mexican subsidiaries;
(v) ineffective controls in our patents registry; (vi) inadequate distribution and segregation of duties within our accounting
department; (vii) deficient distribution to employees and officers of our code of ethics; (viii) failure to integrate all control
processes into an Enterprise Resource Planning (ERP) system; (ix) lack of an accounting manual with accounting instructions for
our most important transactions; (x) failure to create and implement a training plan for our management personnel preparing financial
records; and (xi) incomplete monitoring of certain control deficiencies identified on previous years;</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>Inadequate supervision and controls within our accounting department which prejudiced the financial statement closing process,
conversion of foreign subsidiaries, presentation of financial statements and assets valuation, 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 our management to supervise properly the preparation of consolidated
financial information with the required detail;</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>Deficient and not standardized controls in SimRep related to the physical inventory counts and a very vulnerable procedure
to determine costs due to manual calculations, 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>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) failure to timely approve our policies and procedures
to prepare financial statements in accordance with IFRS and limited knowledge of those standards, (ii) undocumented process and
deficient controls in the control access to information systems, (iii) deficient controls to review and approve cost calculation
of finished goods, (iv) lack of physical inventory of fixed assets; and (v) failure to document and communicate adequately responsibilities
and authority of key financial roles.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><FONT STYLE="color: #010000">C.</FONT></TD><TD>Attestation Report of the Independent Registered Public Accounting Firms</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Report of Independent Registered Public Accounting
Firm </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>The Board of Directors and Stockholders of
Grupo Simec, S.A.B. de C.V.</B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">We have audited Grupo
Simec, S.A.B. de C.V.&rsquo;s internal control over financial reporting as of December 31, 2012, 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</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in; text-align: justify">included in the consolidated financial statements of Corporaci&oacute;n Aceros
DM, S.A. de C.V. and subsidiaries, wholly owned subsidiaries, which total combined assets represent approximately 10% of the total
consolidated assets as of December 31, 2012 and its net combined sales for the year then ended represented approximately a 5% of
the total net consolidated sales. The effectiveness of Corporaci&oacute;n Aceros DM, S.A. de C.V. and subsidiaries 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 DM, S.A. de C.V. and subsidiaries 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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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 International Financial Reporting
Standards (IFRS). 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 IFRS, 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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">(1) Regarding the
entity-level controls and control environment, the COSO framework elements needs to be straightened, there were found significant
deficiencies that could affect the effectiveness of the internal controls, those deficiencies include, (a) IFRS accounting policies
approved after the period end, (b) lack of IFRS expertise in the Internal Audit department, (c) improper controls to define, review
and prove the disclosures in the financial statements, (d) whistleblower line in the Mexican subsidiaries not fully operational
and contact information the website is not updated, (e) ineffective controls in the patents registry, (f) many accounting functions
centralized on</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in; text-align: justify">few persons due to lack of resources and inadequate segregation of duties, (g) insufficient diffusion of the ethical
code, (h) control processes not integrated under one single Enterprise Resource Planning (ERP) system, (i) lack of accounting manual
with instructions on most of accounting records, (j) lack of a training plan for management personnel conducting the preparation
of the Financial Information with IFRS; and (k) incomplete monitoring of some weaknesses reported on previous years due to their
prevalence on the report of this year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">(2) Lack of appropriate
accounting resources during 2012 at the corporate that affected the operation of key supervision controls of the accounting department
that, in turn, affected the financial statement closing process, the conversion of foreign subsidiaries process, the presentation
of the Financial Statements and assets valuation. 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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">(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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">(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: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">- We noted a lack
of control over physical inventory counts and highly manual costing process. An adequate review process is not in place to determine
that inventory counts are complete and performed accurately. Also, a standardized inventory process is not in place for all locations.
This resulted in adjustment to the financial statements related to incomplete inventory counts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">These material weaknesses
were considered in determining the nature, timing and extent of audit tests applied in our audit of 2012 financial statements and
this report does not affect our report dated April 3, 2013 on those financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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, 2012, based on the COSO criteria. The other auditors issued an adverse opinion of Corporaci&oacute;n Aceros DM, S.A. de C.V.
and subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">The other auditors
issued also an adverse opinion of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries, noting that significant deficiencies
were detected on Corporaci&oacute;n Aceros D.M., S.A. de C.V. which, in the aggregate, constitute a material weakness, these significant
deficiencies include: (i) procedures and policies to prepare Financial statements according to IFRS rules not approved timely and
limited knowledge on those standards, (ii) undocumented process and deficient controls in the control access to the information
systems, (iii) deficient controls to review and approve cost calculation of finished goods, (iv) lack of physical inventory of
fixed assets; 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: 0 0.8in; text-align: justify; text-indent: 0.2in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in 0 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify; text-indent: 0.2in">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, 2012 and 2011 and January 1, 2011(date of transition),
and the related consolidated statements of comprehensive income, changes in stockholders&rsquo; equity and cash flows for the years
ended December 31, 2012 and 2011, and our report dated April 3, 2013 expressed an unqualified opinion thereon. We did not audit
the consolidated financial statements of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries as of December 31, 2012
and 2011 and January 1, 2011, acquired by the Company on May 31, 2008, which total combined assets represent approximately 10%,
10% and 15% of the total consolidated assets at those dates, respectively, and its net consolidated sales for the years ended as
of December 31, 2012 and 2011 represented 5% and 11% 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 Corporaci&oacute;n
Aceros D.M., S.A. de C.V. and subsidiaries, is based solely on the reports of the other auditors.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify">Castillo Miranda y Compa&ntilde;&iacute;a,
S.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify">Member of BDO International</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0.8in 0; text-align: justify">C.P.C. Carlos Rivas Ramos</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0.8in 0; text-align: justify">Guadalajara, Jalisco, Mexico</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8in; text-align: justify">April 3, 2013</P>


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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 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"><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,
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 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>

<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: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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>

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<TD STYLE="width: 17.45pt"></TD><TD STYLE="width: 18pt">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>

<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: 17.45pt"></TD><TD STYLE="width: 18pt">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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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 finnancial 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" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><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>

<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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>In our subsidiary Corporaci&oacute;n Aceros DM, S.A. de C.V. we will (i) perform 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.</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,
2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe that many of the remedial
measures adopted by the Audit Committee on April 25, 2012 to address the material weaknesses in internal controls over financial
reporting at SimRep were implemented during the year 2012, the most important remedial measures implemented during 2012 include
(i) adoption of monthly meetings to review the status and valuation of obsolete inventory, (ii) added additional senior accounting
and financial reporting expertise, (iii) added full-time internal auditor, (iv) quarterly financial reviews performed by the external
auditor, (v) direct line of communication from Republic&acute;s Controller to our CFO independent of our CEO&acute;s or CFO&acute;s
involvement, (vi) periodic visits to SimRep by our Internal Auditor and CFO; and (vii) improved whistleblower program and procedures.
Republic also implemented a system to supervise the closing process and simplify the execution of internal controls and the administration
of the supporting documentation.</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 for the year ended December 31, 2012 and the material weakness and deficiencies identified
during that period, we intend to implement the following changes, which we believe are reasonably likely to materially affect our
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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We will review and reform our entity level controls to comply with the COSO framework, addressing all the issues that were
found on our 2012 assessment of our internal control.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><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 and to avoid the </TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"></TD><TD>errors found with respect to our financial statement closing
process and preparation of Financial Statements under IFRS.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>In our subsidiary SimRep we will review the physical inventory and procedures to determine costs and we will standardize these
procedures in accordance to the procedures implemented in the rest of the subsidiaries.</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: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>In our subsidiary Corporaci&oacute;n Aceros D.M., S.A. de C.V. we will (i) train our staff on IFRS, (ii) document and improve
the control access to information systems, (iii) strengthen the controls related to the cost calculations of finished goods, (iv)
perform periodic physical inventories of our fixed assets; and (v) review and update our documentation related to the responsibilities
and authority of key financial roles and communicate adequately.</TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0"></P>

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<TD STYLE="width: 0"><A NAME="a_019"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;16.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;Reserved</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; 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. Rodolfo Garc&iacute;a G&oacute;mez de Parada 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. Garc&iacute;a&rsquo;s experience and understanding with respect to certain accounting and auditing matters. The designation
does not impose on Mr. Garc&iacute;a 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. Garc&iacute;a 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, Times, Serif; 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 2011 and 2012, 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: Mario Moreno Cortez, telephone
number: 011-52-33-3770-6700.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; 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">Our Audit Committee has engaged BDO,
as the independent auditors of our consolidated financial statements, as of and for the years ending December 31, 2012 and 2011.
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 Committee has also engaged BDO RCS SS to audit the consolidated financial statements for the year
ended December 31, 2012, of our subsidiary GV do Brasil Industria e Comercio LTDA A&ccedil;o, located in Brazil,. 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 2012, included in our annual report on Form 20-F
in the amount of Ps. 11.7 million and Ps. 2.4 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 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.</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"><I>Audit Related Fees</I>. In 2012 and
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>. In 2012 and 2011, 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
2012 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 2011 and 2012, 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, Times, Serif; 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, Times, Serif; 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, Times, Serif; 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, Times, Serif; 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 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</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: 0pt; margin-bottom: 6pt; margin-left: 0; text-indent: 0">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"><A NAME="a_027"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; color: #010000">PART
III</FONT>&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_028"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;17.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;Financial Statements</TD></TR></TABLE>

<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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_029"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;18.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;Financial Statements</TD></TR></TABLE>

<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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"><A NAME="a_030"></A></TD><TD NOWRAP STYLE="width: 0.25in"><FONT STYLE="color: #010000">Item&nbsp;19.&nbsp;&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"> </FONT></FONT>&nbsp;Exhibits</TD></TR></TABLE>

<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 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: 12%; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid">Exhibit<BR>
Number</P></td>
    <TD STYLE="width: 88%; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid">Item</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.1</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Amended and Restated by-laws (<I>estatutos sociales</I>) of the registrant, together with an English translation.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">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.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.2</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2007-2008 Rounds Supply Agreement by and Between Republic, Inc. and United States Steel Corporation.*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.3</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">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.**</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.1</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">List of subsidiaries, their jurisdiction of incorporation and names under which they do business.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.1</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.2</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.1</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-bottom: 12pt; padding-left: 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Certifications of chief executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</FONT></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 6in"><B>GRUPO SIMEC, S.A.B. DE C.V.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in">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 6in">Luis Garc&iacute;a Lim&oacute;n</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in"><I>Chief Executive Officer</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in">By: <U>/s/ Mario Moreno Cortez&#9;</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in">Mario Moreno Cortez</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in"><I>Coordinator of Finance</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: May 15, 2013</P>


<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"></P>



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<P STYLE="font: 14pt Book Antiqua, Times, Serif; margin: 0 0 0 21.3pt"></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt; text-align: center; text-indent: 7.1pt"><FONT STYLE="font-size: 10pt; text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>GrupoSimec,
S.A.B. de C.V. and subsidiaries</B></FONT></P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt; text-transform: uppercase"><B>(s</B></FONT><B><FONT STYLE="font-size: 10pt">ubsidiary
of <FONT STYLE="text-transform: uppercase">I</FONT>ndustrias <FONT STYLE="text-transform: uppercase">CH, S.A.B. de
C.V.)</FONT></FONT></B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Consolidated
financial statements </B></FONT></P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>as
of December 31, 2012 and 2011 </B></FONT></P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>and
independent auditors&rsquo; reports</B></FONT></P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0; text-align: center; text-indent: 7.1pt"><B>&nbsp;</B></P>



<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt; text-align: center; text-indent: 7.1pt"><FONT STYLE="text-transform: uppercase"><B></B></FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Index
to financial statements </B></FONT></P>

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<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt"></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: 88%; padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Content&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
    <TD STYLE="width: 12%; padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><U>Page</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Report of Castillo Miranda y Compa&ntilde;ia, S.C.</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-2</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Report of Marcelo de Los Santos y Cia., S.C.</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-3</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Consolidated Statements of Financial Position</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-4</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Consolidated Statements of Comprehensive Income</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-5</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Consolidated Statements of<B> </B>Changes in Stockholders&rsquo; Equity</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-6</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Consolidated Statements of Cash Flows</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-7</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Notes to Consolidated Financial Statements</FONT></TD>
    <TD STYLE="padding-right: 27.9pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">F-8</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt">&nbsp;</P>

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<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 27.9pt 0 14.2pt"></P>


<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM </B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 7.5pt 0 0">The Board of Directors and Stockholders of</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">Grupo Simec, S.A.B. de C.V.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 3.75pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 3.75pt 0 0">We have audited the accompanying consolidated statements of
financial position of Grupo Simec, S.A.B. de C.V. and subsidiaries (the &ldquo;Company&rdquo;) as of December 31, 2012 and 2011
and January 1, 2011 (date of transition), and the related consolidated statements of comprehensive income, changes in stockholders&rsquo;
equity, and cash flows for the years ended December 31, 2012 and 2011. 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 audits. We did not audit the consolidated financial statements of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries
as of December 31, 2012 and 2011 and January 1, 2011, acquired by the Company on May 31, 2008, which total combined assets represent
approximately 10%, 10% and 15% of the total consolidated assets at those dates, respectively, and its net consolidated sales for
the years ended as of December 31, 2012 and 2011 represented 5% and 11% 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 Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries, is based solely on the reports of the other
auditors.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 7.5pt 0 0">We conducted our audits 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 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 audits provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 7.5pt 0 0">In our opinion, based on our audits and the reports of the
other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of Grupo Simec, S.A.B. de C.V. and subsidiaries as of December 31, 2012 and 2011 and January 1, 2011 (date of transition),
and the results of their operations, the changes in stockholders&rsquo; equity and cash flows for the years ended December 31,
2012 and 2011, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards
Board.</P>

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

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">As mentioned in Note 2, the Company adopted International Financial
Reporting Standards as issued by the International Accounting Standards Board for the first time for the year ended December 31,
2012. Such adoption affected the amounts previously reported in the Company&rsquo;s consolidated financial statements which were
presented under Mexican Financial Reporting Standards.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 7.5pt 0 0">We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States of America), Grupo Simec, S.A.B. de C.V. and subsidiaries&rsquo; internal
control over financial reporting as of December 31, 2012, based on criteria established in Internal Control &ndash; 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 consolidated financial statements of Corporaci&oacute;n
Aceros D.M., S.A. de C.V. and subsidiaries. The effectiveness of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries
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 Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries internal control over
financial reporting, is based solely on the report of the other auditors. Our report dated April 3, 2013 expressed an adverse opinion
on the effectiveness of the Company&rsquo;s internal control over financial reporting.</P>

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

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">Castillo Miranda y Compan&iacute;a, S.C.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">/s/ Carlos Rivas Ramos</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">C.P.C. Carlos Rivas Ramos</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">Guadalajara, Jalisco, Mexico</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">April 3, 2013</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</P>

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

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board of Directors and Stockholders of</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Corporaci&oacute;n Aceros D.M., S.A. de C.V.</P>

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

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have audited the accompanying consolidated
statements of financial position of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries (the &ldquo;Company&rdquo;) as
of December 31, 2012 and 2011 and January 1, 2011 (date of transition), and the related consolidated statements of comprehensive
income, changes in stockholders&rsquo; equity, and cash flows for the years ended December 31, 2012 and 2011. 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 audits.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We conducted our audits 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 the financial statements are free of material misstatements.
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 statements presentation. We believe that our audits provide a reasonable basis for our opinion.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">In our opinion, based on
our audits, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries as of December 31, 2012 and 2011 and January 1, 2011 (date of
transition), and the results of their operations, the changes in stockholders&rsquo; equity and cash flows for the years ended
December 31, 2012 and 2011, in conformity with International Financing Reporting Standards as issued by the International Accounting
Standards Board.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">As mentioned in Note 2, the
Company adopted International Financing Reporting Standards as issued by the International Accounting Standards Board for the first
time for the year ended December 31, 2012. Such adoption affected the mounts previously reported in the Company&rsquo;s consolidated
financial statements which were presented under Mexican Financial Reporting Standards.</P>

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

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We also have audited, in
accordance with the standards of the Public Accounting Oversight Board (United States of America), Corporaci&oacute;n Aceros D.M.,
S.A. de C.V. and subsidiaries&rsquo; internal control over financial reporting as of December 31, 2012, based on criteria established
in Internal Control &ndash; Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Our report dated April 3, 2013 expressed an adverse opinion on the effectiveness of the Company&rsquo;s internal control
over financial reporting.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Marcelo de los Santos y C&iacute;a.,
S.C.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">/s/ Marcelo de los Santos
Anaya</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">C.P.C. Marcelo de
los Santos Anaya</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">San Luis Potos&iacute;, San
Luis Potos&iacute;, M&eacute;xico</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">April 3, 2013</P>



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<P STYLE="margin: 0"></P>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Grupo Simec, S.A.B. de C.V.
and Subsidiaries</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(A Subsidiary of Industrias
CH, S.A.B. de C.V.) </B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Consolidated Statements of Financial
Position</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>As of December 31, 2012 and
2011, and January 1, 2011 (date of transition)</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(In thousands of Mexican pesos)</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 13.9pt 1pt 14.2pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 4pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt SimSun; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2" STYLE="padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 2pt; font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Note</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 2pt; font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>December 31,</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>2 0 1 1</B></FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Assets</B></FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Current assets:</B></FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Cash and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">7</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">8,102,314</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">6,537,088</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,384,917</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Accounts receivable:</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Trade, less reserves of $234,520 ($264,698 in 2011 and $237,379 at January 1, 2011)</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">8</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,215,648</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,031,679</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,465,208</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Related parties</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">20-b</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">118,002</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">169,018</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">126,145</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Recoverable taxes</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">9</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">324,059</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">500,688</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">677,982</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other receivable</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">83,982</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">8,283</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">53,358</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Total accounts receivable, net</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,741,691</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,709,668</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,322,693</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Inventories, net</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">10</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">6,234,216</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">5,758,027</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">5,216,677</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Prepaid expenses</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">241,719</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">193,985</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">262,708</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Total current assets</B></FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">17,319,940</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">16,198,768</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">12,186,995</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 10.6pt; font-family: Times New Roman, Times, Serif; text-indent: -7.1pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Non-current inventories, net</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">10</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">1,687,659</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">1,792,040</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">1,605,968</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Property, plant and equipment, net</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">11</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">9,776,411</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">9,346,394</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">9,274,620</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Intangible and other non-current assets, net</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">12</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,672,775</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,781,849</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">4,079,758</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Total assets</B></FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">32,456,785</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">31,119,051</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">27,147,341</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 49%; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Liabilities and stockholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Current liabilities:</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Short-term debt</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">13</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,922</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">4,225</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,732</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Trade accounts payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">14</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,330,479</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,294,701</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,162,801</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Related parties payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">20-b</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">662,134</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">706,385</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">629,676</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Derivative financial instruments</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">15</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">1,075</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">35,456</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">79,708</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Accrued expenses and taxes other than income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">14</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">497,793</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">535,743</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">588,469</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt; color: black">Income tax payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">241,727</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">246,247</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">434,220</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Total current liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,737,130</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,822,757</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,898,606</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Long term liabilities:</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Employee benefits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">16</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">77,869</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">67,773</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">63,075</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Deferred income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">17</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,967,641</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,048,882</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,673,896</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Other liabilities </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">6,763</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">48,187</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">51,003</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Contingencies and Commitments</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -1.95pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">26,&nbsp;27</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Total long-term liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,052,273</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">3,164,842</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,787,974</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Total liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">6,789,403</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">6,987,599</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">6,686,580</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black"><B>Stockholders&rsquo; equity</B><FONT STYLE="font-weight: normal">:</FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">18</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Capital stock</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,832,268</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,832,268</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,832,268</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Additional paid-in capital</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">4,153,850</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">4,153,850</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">4,153,850</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Retained earnings</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">16,662,517</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">14,592,535</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">11,700,720</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Cumulative translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">168,109</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">413,170</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Fair value of derivative financial instruments</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -2.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">(1,060)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -2.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">(26,360)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -2.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">(63,349)</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 22.1pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Total controlling interest</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">23,815,684</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">21,965,463</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">18,623,489</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 5.1pt; font-family: Trebuchet MS, Times, Serif; text-indent: -5.1pt"><FONT STYLE="font-size: 10pt; color: black">Non-controlling interest</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">19</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">1,851,698</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">2,165,989</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">1,837,272</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt"><B>Total stockholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">25,667,382</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">24,131,452</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">20,460,761</FONT></TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right">&nbsp;</TD>
    </TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">32,456,785</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">31,119,051</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: black">27,147,341</FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 4pt Trebuchet MS, Times, Serif; margin: 0 28pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 4pt Trebuchet MS, Times, Serif; margin: 0 28pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements</P>


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<P STYLE="font: 11pt Book Antiqua, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"></P>

<P STYLE="font: 11pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Grupo Simec, S.A.B. de C.V.
and Subsidiaries</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(A Subsidiary of Industrias
CH, S.A.B. de C.V.) </B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Consolidated Statements of Comprehensive
Income</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For the years ended December
31, 2012 and 2011</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(In thousands of Mexican pesos,
except earnings per share figures)</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 13.9pt 1pt 14.2pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt">&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>&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nota</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2 0 1 2</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2 0 1 1</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.55pt">&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: 46%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-left: 2pt">Net sales</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="width: 11%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">29,523,967</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="width: 11%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">29,270,498</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt; padding-left: 2pt">Cost of sales</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: right">21</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">25,960,164</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">25,563,488</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: left; text-indent: -7.1pt; padding-left: 31.9pt">Gross profit</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">3,563,803</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">3,707,010</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-left: 2pt">Administrative expenses</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: right">21</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,228,322</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,049,953</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-left: 2pt">Other operating (income) expense, net</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: right">22</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(181,229</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">113,706</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-left: 2pt">Interest income</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(23,594</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(26,135</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-left: 2pt">Interest expense</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">23,025</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">23,725</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Foreign exchange loss (gain)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5-a</FONT></TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">509,899</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(581,630</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: left; text-indent: -7.1pt; padding-left: 31.9pt">Income before income taxes</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">2,007,380</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">3,127,391</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-bottom: 1pt; padding-left: 2pt">Income taxes</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: right">17</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">53,632</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">148,830</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 31.9pt">Net income for the year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,953,748</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">2,978,561</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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>&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="font: 5pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt">&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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; text-indent: -5.1pt; padding-left: 5.1pt">Other comprehensive (loss) income:</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: 46%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; text-indent: -5.1pt; padding-left: 5.1pt">Translation effects of foreign subsidiaries</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(443,118</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD><TD STYLE="width: 5%; font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">655,141</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-bottom: 1pt; text-indent: -5.1pt; padding-left: 5.1pt">Fair value of derivative financial instruments, net of taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">25,300</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">36,989</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-bottom: 1pt; text-indent: -5.1pt; padding-left: 5.1pt">Total other comprehensive (loss) income for the year, net of income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(417,818</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">692,130</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 31.9pt">Total comprehensive income for the year</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,535,930</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">3,670,691</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; text-indent: -5.1pt; padding-left: 5.1pt">Net income (loss) attributable to:</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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; text-indent: -5.1pt; padding-left: 5.1pt">Controlling interest</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">2,069,982</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">2,891,815</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt; text-indent: -5.1pt; padding-left: 5.1pt">Non-controlling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(116,234</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">86,746</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -5.1pt; padding-left: 5.1pt">&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-family: Trebuchet MS, Times, Serif; color: black; text-align: left; padding-bottom: 2.5pt; text-indent: -5.1pt; padding-left: 5.1pt">Net income for the year</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,953,748</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">2,978,561</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; text-align: left; padding-left: 2pt">Comprehensive income (loss) attributable to:</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-family: Trebuchet MS, Times, Serif; text-align: left; padding-left: 2pt">Controlling interest</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,850,221</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">3,341,974</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; padding-bottom: 1pt; padding-left: 2pt">Non-controlling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">(314,291</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">328,717</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 2pt">Comprehensive income for the year</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">1,535,930</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">3,670,691</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; padding-left: 2pt">Earnings per share:</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-family: Trebuchet MS, Times, Serif; padding-bottom: 2.5pt; text-indent: -3.55pt; padding-left: 3.55pt">Weighted average shares outstanding (in thousands of shares)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">497,709</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">497,709</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 31.9pt">Income per share (controlling interest) (pesos)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5-n</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">4.16</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: black; text-align: right">5.81</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: black; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt"></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements</P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt">&nbsp;</P>


<P STYLE="font: 11pt Book Antiqua, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Grupo Simec, S.A.B. de C.V.
and Subsidiaries</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(A Subsidiary of Industrias
CH, S.A.B. de C.V.) </B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Consolidated Statements of Changes
in Stockholders&rsquo; Equity</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For the years ended December
31, 2012 and 2011</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(In thousands of Mexican pesos)</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="width: 28%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Capital </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>stock</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Additional</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>paid-in</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>capital</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Retained</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>earnings</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Cumulative</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>translation </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>effect in</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>foreign </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>subsidiaries</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Fair value of</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>derivative</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>financial</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>instruments</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0 0 0 2.85pt; text-align: center"><B>Controlling</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>interest</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0 0 0 2.85pt; text-align: center"><B>Non-controlling</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>interest</B></P></TD>
    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Total</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>stockholders&rsquo;</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>equity</B></P></TD></TR>
</TABLE>
<P STYLE="font: 6pt Trebuchet MS, Times, Serif; margin: 0 0 0 21.25pt">&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: 36%; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black"><B>Balance as of January 1, 2011</B></FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">2,832,268</FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">4,153,850</FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">11,700,720</FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">(63,349)</FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">18,623,489</FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">1,837,272</FONT></TD>
    <TD STYLE="width: 1%; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="width: 7%; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">20,460,761</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 5.05pt; font-size: 9.5pt; text-indent: -5.05pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">Comprehensive income</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">2,891,815</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">413,170</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">36,989</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">3,341,974</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">328,717</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">3,670,691</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black"><B>Balance as of December 31, 2011</B></FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">2,832,268</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">4,153,850</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">14,592,535</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">413,170</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">(26,360)</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">21,965,463</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">2,165,989</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">24,131,452</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 5.05pt; font-size: 9.5pt; text-indent: -5.05pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">Comprehensive income (loss)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">2,069,982</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">(245,061)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">25,300</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">1,850,221</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">(314,291)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">1,535,930</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black"><B>Balance as of December 31, 2012</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">2,832,268</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">4,153,850</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">16,662,517</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">168,109</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">(1,060)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">23,815,684</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">1,851,698</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2pt; padding-left: 2pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.7pt; padding-left: 2pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: black">25,667,382</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements</P>

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


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    <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 11pt Book Antiqua, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Grupo Simec, S.A.B. de C.V.
and Subsidiaries</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(A Subsidiary of Industrias
CH, S.A.B. de C.V.) </B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Consolidated Statements of Cash
Flows</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For the years ended December
31, 2012 and 2011</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(In thousands of Mexican pesos)</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 13.9pt 1pt 14.2pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 9.5pt Trebuchet MS, 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">2 0 1 2</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">2 0 1 1</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 3.55pt">&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="color: black; font-weight: bold; text-align: left; padding-left: 3.55pt">Operating activities:</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%; color: black; text-align: left; padding-left: 2pt">Income before income taxes</TD><TD STYLE="width: 8%; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; color: black; text-align: left">$</TD><TD STYLE="width: 12%; color: black; text-align: right">2,007,380</TD><TD STYLE="width: 1%; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; color: black; text-align: left">$</TD><TD STYLE="width: 12%; color: black; text-align: right">3,127,391</TD><TD STYLE="width: 1%; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: SimSun; padding-left: 2pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; padding-left: 2pt">Adjustments for:</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Depreciation and amortization</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">1,012,022</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">949,516</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Employee benefits</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">10,096</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">4,698</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Not realized foreign exchange loss (gain) &ndash; net</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">479,862</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(664,023</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Allowance for slow moving inventories</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(56,062</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">118,705</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Allowance for doubtful accounts</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">9,436</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">6,778</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Interest income from investing activities</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(23,594</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(26,135</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 12.15pt">Interest expense from financing activities</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">23,025</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">23,725</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: SimSun; text-indent: -7.05pt; padding-left: 12.15pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: SimSun; text-indent: -7.05pt; padding-left: 12.15pt">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">3,462,165</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">3,540,655</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: SimSun; text-indent: -7.05pt; padding-left: 12.15pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Decrease (increase) in trade receivable</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">725,462</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(436,933</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Decrease (increase) due from related parties</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">46,379</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(42,873</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">(Increase) decrease in inventories</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(712,039</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">15,095</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Decrease in other accounts receivable, recoverable taxes and prepaid expenses</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">23,683</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">407,890</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Increase (decrease) in trade accounts payable</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">153,189</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(45,518</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Increase (decrease) in due to related parties payable</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">8,293</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(182,811</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Decrease in accrued expenses and taxes other than income taxes</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(52,557</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(294,309</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 12.15pt">Income taxes paid</TD><TD STYLE="font-family: SimSun; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(6,922</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 24.8pt">Net cash flows provided by operating activities</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">3,654,575</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">2,954,274</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; font-weight: bold; text-align: left; padding-left: 2pt">Investing activities:</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Investing in shares of subsidiary company</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(26,796</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Acquisition of property, plant and equipment</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(1,303,974</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(432,000</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Increase in other noncurrent assets</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(199,845</TD><TD STYLE="color: black; text-align: left">)</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(34,200</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 12.15pt">Interest income collected</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">23,594</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">26,135</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 24.8pt">Net cash flows used in investing activities</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(1,507,021</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(440,065</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -10.75pt; padding-left: 10.75pt">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; font-weight: bold; text-align: left; padding-left: 2pt">Financing activities:</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Loans received from related parties</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">74,963</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Payments of loans received from related parties</TD><TD STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">(51,225</TD><TD STYLE="color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 12.15pt">Interest paid</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(23,025</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(23,725</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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 STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 24.8pt">Net cash flows (used in) provided by financing activities</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(23,025</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">13</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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 STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Net increase in cash and cash equivalents</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">2,124,529</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">2,514,222</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: SimSun; text-indent: -7.05pt; padding-left: 12.15pt">&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 STYLE="font-family: SimSun">&nbsp;</TD>
    <TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: right">&nbsp;</TD><TD STYLE="font-family: SimSun; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="color: black; text-align: left; text-indent: -7.05pt; padding-left: 12.15pt">Cash and cash equivalents at the beginning of year</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">6,537,088</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black">&nbsp;</TD>
    <TD STYLE="color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; text-align: right">3,384,917</TD><TD STYLE="color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: SimSun; text-indent: -7.05pt; padding-left: 12.15pt">&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="color: black; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 12.15pt">Effects of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(559,303</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">637,949</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2pt">&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-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 24.8pt">Cash and cash equivalents at the end of year</TD><TD STYLE="color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: right">8,102,314</TD><TD STYLE="padding-bottom: 2.5pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: right">6,537,088</TD><TD STYLE="padding-bottom: 2.5pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements</P>


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<P STYLE="font: 11pt Book Antiqua, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Grupo Simec, S.A.B. de C.V.
and Subsidiaries</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(A Subsidiary of Industrias
CH, S.A.B. de C.V.) </B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Notes to the Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For years ended December 31,
2012 and 2011, and as of January 1, 2011 (date of transition)</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>(In thousands of Mexican pesos,
except foreign currency and where indicated)</B></P>

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<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; text-transform: uppercase"><B>1.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Nature of business</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">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. Its parent
and ultimate holding company is Industrias CH, S.A.B. de C.V. (Industrias CH or ICH). Grupo Simec, S.A.B. de C.V. is domiciled
in Guadalajara, Jalisco, Mexico and the address of its registered office and main head quarters is located at Calzada L&aacute;zaro
C&aacute;rdenas 601, Guadalajara, Jalisco, Mexico 44440.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The main activities of Grupo
Simec, S.A.B. de C.V. and subsidiaries (the Company) are the manufacture and sale of iron and steel products for the construction
and automotive industries both in Mexico, the United States of America (USA) and Canada.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Adoption of International
Financial Reporting Standards</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">As of January 1, 2011,
the Company adopted International Financial Reporting Standards (IFRS), and its amendments and interpretations in effect as of
December 31, 2012, issued by the International Accounting Standard Board (IASB); consequently, it applied IFRS 1, <I>Initial Adoption
of International Financial Reporting Standards</I>.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Transitions
to IFRS &ndash; </I></B>The last annual consolidated financial statements of the Company were prepared in accordance with Mexican
Financial Reporting Standards (MFRS, individually referred to as <I>Normas de </I>Informaci&oacute;n<I> Financiera </I>or NIFs).
Certain accounting standards and valuation methods applied in the previously issued 2011 consolidated financial statements prepared
in accordance with MFRS differ from the accounting standards and valuation methods of IFRS. Accordingly, the comparative 2011 amounts
were restated to reflect these adjustments.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The reconciliations and descriptions
of the effects of the Company&rsquo;s transition from MFRS to IFRS are explained in Note 28.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Company&rsquo;s transition
date to IFRS is January 1, 2011. In preparing its first consolidated financial statements in accordance with IFRS, transition rules
have been applied to the amounts previously reported in accordance with MFRS. IFRS 1 generally requires the retrospective application
of all IFRS and related improvements and interpretation in an entity&rsquo;s first IFRS financial statements. However, IFRS 1 requires
certain mandatory exceptions and permits other optional exemptions from retrospective application in order to assist entities in
the transition process. The Company has applied the following mandatory exceptions as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Accounting estimates</I></B>
&ndash; Accounting estimates made under MFRS in 2011 are consistent with estimates under IFRS made for the same periods and are
thus, not retrospectively modified, except for the fixed asset componentization as explained in Note 28.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Hedging instruments</I></B>
- Certain hedging instruments that were designated as hedges under MFRS qualify for hedge accounting under International Accounting
Standards (IAS) 39, <I>Financial Instruments: Recognition and Measurement</I>. No designations of hedging instruments were made
retrospectively.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other mandatory exceptions
were not applicable to the Company.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify"></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Additionally, the Company has
applied the optional exemptions of first-time adoption as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The Company elected
not to apply IFRS 3, <I>Business Combinations,</I> retrospectively to prior business combinations that occurred before its date
of transition to IFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The Company elected
to present the items of property, plant and equipment at their net book value under MFRS at the transition date, which represents
the depreciated cost adjusted for price changes of a specific index (deemed cost). </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The Company elected
to recognize all cumulative unrecognized actuarial gains and losses at the date of transition to MFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The Company elected
to reset to zero the balance of cumulative translation adjustment of foreign subsidiaries at the date of transition.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The Company applied
the transitional provisions set out in paragraphs 27 and 28 of IAS 23, <I>Borrowing Costs</I>. Therefore, the Company designated
the transition date to IFRS as the commencement date for capitalization of borrowing costs relating all qualifying assets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>3.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Significant events</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pursuant to a resolution
of the General Extraordinary Stockholders&rsquo; Meeting held on October 8, 2012, the merger of Simec Steel, Inc., Simec International
2, Inc., Simec International 3, Inc. and Simec International 4, Inc., with Simec Steel, Inc. as the surviving company was approved.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On October 30, 2012,
Grupo Simec, S.A.B. de C.V. and Corporaci&oacute;n ASL, S.A. de C.V. (subsidiary company), purchased shares of a company named
Orge S.A. de C.V. (Orge), for $&nbsp;26,796. In the same date, Corporaci&oacute;n ASL, S.A. de C.V., increased capital stock in
Orge by $&nbsp;66,725, which was used to pay an Orge liability at that date. The Company acquired one share of class &ldquo;I&rdquo;,
&ldquo;B&rdquo;, that represents 0.01% of the shares of that class and 53,564,127 shares of class &ldquo;II&rdquo;, &ldquo;L&rdquo;,
representing 100% of the shares of that class. These shares do not have par value and shares of class &ldquo;II&rdquo; are restricted,
limited and have no power to determine the management of the company; however the Board of Directors is formed by directors and
stockholders of Grupo Simec, S.A.B. de C.V., thus, from the date of acquisition the Company consolidates the financial statements
of Orge. Orge was incorporated on July 19, 2012 through a spin off, tax losses of $&nbsp;497,793 were transmitted and prior to
the Company&rsquo;s acquisition of the shares, Orge had a loss on the sale of some securities that originated in a tax loss of
$&nbsp;1,700,461, which part of these were used in their tax return. The principal activities of Orge are the manufacture and sale
of iron and steel products and it commenced operations in October 2012. The condensed statement of financial position at the date
of acquisition was as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Assets:</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 73%; padding-right: -5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred income tax</FONT></TD>
    <TD STYLE="width: 5%; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="width: 22%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">93,521</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Liabilities:</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Creditors</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">66,725</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Stockholders&rsquo; equity</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">26,796</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pursuant to a resolution
of the General Extraordinary Stockholders&rsquo; Meeting of Abastecedora Sider&uacute;rgica, S.A. de C.V. and Acero D.M., S.A.
de C.V. (both part of Grupo San &ndash; See Note 5), held on August 1, 2012, the merger of the companies with Acero D.M., S.A.
de C.V. as the surviving company was approved. Both of them were subsidiaries of the Company.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On February 3, 2011,
SimRep Corporation (a subsidiary of the Company domiciled in the USA), 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 USD$ 2.5 million and the essential forgiveness
of USD$ 6.0 million of net receivables due from Bluff City Steel to the Company. Prior to the acquisition, Bluff City Steel was
a vendor to the Company that performed certain production processes, and was a customer of the Company, acquiring Company product
for further processing and sale. The Company made the acquisition to make these processes part of its internal production process.
</FONT></TD></TR></TABLE>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">In November 2011,
Republic Steel, Inc. (a subsidiary of SimRep Corporation) 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 <FONT STYLE="color: black">working capital required
to fund such receivables. The agreement had an initial term of one year</FONT> and is automatically extended for additional periods
of one year each unless either party provides written notice of cancellation. No notice was provided in 2012. </FONT></TD></TR></TABLE>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 78pt; text-align: justify">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 USD$&nbsp;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 Comprehensive Income.</P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 78pt; text-align: justify">The purchaser shall have no recourse
against the Republic Steel, Inc. 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.&nbsp;&nbsp;As collateral for the repayment of advances for
receivables sold, the purchaser has a priority security interest in all accounts receivable of the Republic Steel, Inc.</P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 78pt; text-align: justify">The Company sold a face amount of
USD$&nbsp;31.2 million and USD$&nbsp;11.0 million of accounts receivable to the purchaser during the years ended December 31, 2012
and 2011, respectively. Discount fees incurred pursuant to this agreement were approximately USD$&nbsp;0.5 million and USD$&nbsp;0.2
million for the years ended December 31, 2012 and 2011, respectively. There was USD$&nbsp;2.6 million and USD$&nbsp;0.9 million
of accounts receivable factored which had not been collected by the purchaser at December 31, 2012 and 2011, respectively. The
2012 amount is subject to possible charge-back to the Company.</P>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pursuant to a resolution
of the General Extraordinary Stockholders&rsquo; Meeting held between May 20, 2011 and October 3, 2011, 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 residence to California, United States of America, becoming incorporated societies (Incorporated
or Inc.) in accordance with the provisions of the State of California, in the United States of America. See paragraph a. above.</FONT></TD></TR></TABLE>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">g.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On May 31, 2011, Grupo
Simec, S.A.B. de C.V. sold its shares of Arrendadora Norte de Matamoros, S.A. de C.V, to Perfiles Comerciales Sigosa, S.A. de C.V.
(subsidiary of ICH) for $&nbsp;42,500, that represented the book value of the shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 9pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">h.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pursuant to a resolution
of the General Extraordinary Stockholders&rsquo; Meeting of Acero Transportes, S.A. de C.V. and Acero Transportes San, S.A. de
C.V. (both part of Grupo San-See Note 5), held on May 2, 2011, the merger of both companies with balances as of April 30, 2011,
with Acero Transportes, S.A. de C.V. as the surviving company was autorized.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">i.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pursuant to a resolution
of the General Extraordinary Stockholders&rsquo; Meeting of Procesadora Industrial San, S.A. de C.V. and Malla San, S.A. de C.V.
(both part of Grupo San &ndash; See Note 5), held on September 1, 2011, the merger of both companies with balances as of July 31,
2011, with Malla San, S.A. de C.V. as the surviving company was authorized.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">j.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On December 30, 2011,
Simec International 7, S.A. de C.V. sold to Corporaci&oacute;n ASL, S.A. de C.V. (both subsidiaries of the Company), the total
of its share participation on Corporaci&oacute;n Aceros D.M., S.A. de C.V., equivalent to 627,305,446 shares (99.9% of the common
stock) for $&nbsp;3,200,000, with an initial payment of $&nbsp;62,957 and the remaining $&nbsp;3,137,043, through a credit title
payable no later than April 30, 2012. This operation generated a tax loss of $&nbsp;7,859,922 ($&nbsp;8,384,742 restated as of
December 31, 2012), which according to the Income Tax Law, is deductible only against future profits on sale of shares. On January
30, 2012, Simec International 7, S.A. de C.V., filed an &ldquo;Amparo&rdquo; against the tax provision that limits the deduction
of this loss.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">k.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On September 3, 2010,
a Brazilian company GV do Brasil Industria e Comercio de A&ccedil;o LTDA. was incorporated, which on August 5, 2011 acquired a
section of land for 1&rsquo;300,000 square metre located wear Pindamonhangaba, State of Sao Paulo, for a value of approximately
USD $&nbsp;8 million. The Company is building a steel plant on that land and estimates starting operations in August 2013. The
budget of this investment is approximately USD$&nbsp;236 million (consisting of USD$&nbsp;171 million on direct way and USD$&nbsp;65
million as incentives on foreign investments granted by the government of Brazil). At inception, this plant will have an installed
capacity of 520,000 tons of billet and 400,000 tons of finished product between rod and wire, mainly for the construction industry
and it is estimated to have a workforce of approximately 800. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>4.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Application of
new and revised standards and interpretations</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company has not applied
the following new and revised IFRS that have been issued but are not yet effective:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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: 81%; padding-right: 5.4pt; padding-left: 15.85pt; text-align: justify; text-indent: -13pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><B>Effective for annual periods beginning on or after</B></FONT></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: 2.85pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IFRS 9, <I>Financial instruments</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IFRS 10, <I>Consolidated financial statements</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IFRS 11, <I>Joint arrangements</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IFRS 12, <I>Disclosure of interests in other entities</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IFRS 13, </FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><I>Fair Value Measurement</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IAS 27, <I>Consolidated and separate financial statements - Reissued as IAS 27 Separate financial statements (as amended in 2011)</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">IAS 28, <I>Investments in associates &ndash; Reissued as IAS 28 Investment in associates and joint ventures (as amended in 2011)</I></FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"> </FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><I>Amendments to IFRS 7 Disclosures &ndash; Transfers of Financial Assets</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><I>Amendments to IFRS 9 and IFRS 7 Mandatory Effective Date of IFRS 9 and Transition Disclosures</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><I>Amendments to IFRS 10, IFRS 11 and IFRS 12, Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><I>IAS 19 (as revised in 2011) Employee Benefits</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><I>Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2014</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-indent: -13pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><I>Amendments to IFRSs Annual Improvements to IFRSs 2009-2011 Cycle except for the amendment to IAS 1</I></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">January 1, 2013</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">On the date of issuance of these
consolidated financial statements, the Company has not determined any effects of these new standards on its financial information<FONT STYLE="color: black">.</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>5.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Basis for the preparation
and presentation of the financial statements</B></FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><FONT STYLE="color: #1A171B"><B><I>Basis
of preparation </I></B></FONT><I><FONT STYLE="color: black">&ndash;</FONT><FONT STYLE="color: #1A171B"><B> </B></FONT></I><FONT STYLE="color: #1A171B">The
consolidated financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair
value of the consideration given in exchange for assets. </FONT></P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As a result of early adoption
of IFRS as mentioned in Note 2, the <FONT STYLE="color: #1A171B">consolidated </FONT>financial statements have been prepared in
accordance with the IFRS-1, <I>First-time Adoption of International Financial Reporting Standards.</I></P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><FONT STYLE="color: #1A171B"><B><I>Basis
of consolidation </I></B>&ndash; </FONT>The consolidated financial statements incorporate the financial statements of Grupo Simec,
S.A.B. de C.V. and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to
govern the financial and operating policies of an entity so as to obtain benefits from its activities. Income and expenses of subsidiaries
acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date
of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income (loss) of subsidiaries is attributed
to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having
a deficit balance.</P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">During the consolidation process,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by
other members of the group. All significant intercompany transactions, balances, income and expenses are eliminated on consolidation.</P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Changes in the Company&rsquo;s
ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as
equity transactions. The carrying amounts of the Company&rsquo;s interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests
are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners
of the Company.</P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">When the Company loses control
of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of
the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including
goodwill), and liabilities of the subsidiary and any non-controlling interests. The amounts recognized in other comprehensive income
related to the subsidiaries are recorded in the same manner of the availability of related assets or liabilities. The fair value
of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition
for subsequent accounting under IAS 39, <I>Financial Instruments: Recognition and Measurement,</I> or, when applicable, the cost
on initial recognition of an investment in an associate or a jointly controlled entity.</P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2012 and 2011,
the subsidiaries of Grupo, Simec, S.A.B. de C.V. included in the consolidation are as follows.</P>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Percentage of equity owned</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 61%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -4.55pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Subsidiaries established in Mexico:</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Arrendadora Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Coordinadora de Servicios Sider&uacute;rgicos de Calidad, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Industrias del Acero y del Alambre, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Procesadora Mexicali, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Servicios Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Sistemas de Transporte de Baja California, S.A.&nbsp;de&nbsp;C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Operadora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A.&nbsp;de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Operadora de Metales, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.45pt; padding-left: 5.4pt; font-size: 9.5pt; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Comercializadora Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Percentage of equity owned</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 61%; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Subsidiaries established in Mexico:</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">CSG Comercial, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.95%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.95%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Comercializadora de Productos de Acero de Tlaxcala, S.A.&nbsp;de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.95%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.95%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Sider&uacute;rgica de Baja California, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.95%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.95%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Operadora de Servicios de la Industria Sider&uacute;rgica ICH, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Comercializadora MSAN, S.A. de C.V.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International 2, Inc.&nbsp;&nbsp;&nbsp;(1)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International 3, Inc. &nbsp;&nbsp;(1)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Corporaci&oacute;n Aceros DM, S.A. de C.V. y subsidiaries&nbsp;&nbsp;&nbsp;(2)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International 4, Inc.&nbsp;&nbsp;&nbsp;(1) </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International 5, Inc.&nbsp;&nbsp;&nbsp;(1) </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Acero Transportes San, S.A. de C.V.&nbsp;&nbsp;&nbsp;(2)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec Acero, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Corporaci&oacute;n ASL, S. A. de C. V.&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International 6, S. A. de C. V.&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec International 7, S. A. de C. V.&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Corporativos G&amp;DL, S.A. de C.V.&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Orge, S.A. de C.V.&nbsp;&nbsp;&nbsp;(3)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">99.99%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">-</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 61%; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Subsidiaries established in foreign countries:</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 9%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 2.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">SimRep Corporation and Subsidiaries&nbsp;&nbsp;&nbsp;(4) (5) (6)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">50.22%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">50.22%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Pacific Steel, Inc.&nbsp;&nbsp;&nbsp;(5)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Pacific Steel Projects, Inc.&nbsp;&nbsp;&nbsp;(5)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec Steel, Inc.&nbsp;&nbsp;&nbsp;(5)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Simec USA, Corp.&nbsp;&nbsp;&nbsp;(5)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Undershaft Investments, NV.&nbsp;&nbsp;&nbsp;(7)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.05pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">GV do Brasil Industria e Comercio de A&ccedil;o LTDA&nbsp;&nbsp;&nbsp;(8)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">100.00%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 35.45pt; text-align: right"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1)</FONT></TD><TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Companies that changed its address
and tax residence to California, United States of America, during 2011. From this year, their activity is the acquisition of new
businesses or projects</FONT> <FONT STYLE="font-family: Trebuchet MS, Times, Serif">(investment funds). See Note 3 a.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Companies located
in San Luis Potos&iacute;, which were acquired by Grupo Simec, S.A.B. de C.V. in 2008. For purposes of this report constitute part
of the &ldquo;Grupo San&rdquo;.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Companies acquired
in 2012. See Note 3-b.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(4)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">ICH (holding Company)
owns 49.78% of the shares in this company.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(5)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Business established
in the United States of America, except a subsidiary of SimRep which is established in Canada.</FONT></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: 35.45pt; text-align: right"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(6)</FONT></TD><TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">SimRep as individual company
has not significant</FONT> <FONT STYLE="font-family: Trebuchet MS, Times, Serif">operations or assets, other than its investment
in Republic Steel. Until September 2011, this subsidiary was named Republic Engineered Products, Inc. For purposes of this report,
these companies are named &ldquo;Republic&rdquo;.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(7)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Company established
in Cura&ccedil;ao.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(8)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Company established
in Brazil.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><FONT STYLE="color: #1A171B"><B><I>Summary</I></B></FONT><B>
of significant accounting policies<FONT STYLE="color: #1A171B"><I> </I></FONT></B><I><FONT STYLE="color: black">&ndash;</FONT><FONT STYLE="color: #1A171B"><B>
</B></FONT></I>The accompanying consolidated financial statements comply with IFRS. Their preparation requires management to make
certain estimates and use certain assumptions to value certain items contained in the financial statements and make the disclosures
required therein. However, actual results may differ from these estimates. The Company&rsquo;s management, using its professional
judgment, believes that the estimates made and assumptions used were adequate under the circumstances. The significant accounting
policies of the Company are as follows.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Translation
of financial statements of foreign subsidiaries </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B>
</B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">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 International
Accounting Standard (IAS) 21, <I>The Effects of Changes in Foreign Exchange Rates</I>. 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.
</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The U.S. dollar is considered
as the functional currency of the U.S. subsidiaries, SimRep Corporation and Subsidiaries, Inc. (Republic) and Pacific Steel, Inc.,
and Brazilian real for GV do Brasil Industria e Comercio de A&ccedil;o LTDA.; therefore the financial statements of these subsidiaries
were translated into Mexican pesos by applying:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The exchange rates
at the balance sheet date to all assets and liabilities.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The historical exchange
rate at stockholders&rsquo; equity accounts and revenues, costs and expenses.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 78pt; text-align: justify">Translation differences are carried
directly to the consolidated statements of comprehensive income as other comprehensive income under the caption translation effects
of foreign subsidiaries.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Mexican peso was considered
the functional currency of the Company&rsquo;s USA subsidiaries, Simec USA, Corp., Pacific Steel Projects, Inc., Simec Steel Inc.
and Simec International 2, 3, 4 and 5 which use the U.S. dollar as its recording currency; therefore the financial statements were
translated to Mexican pesos as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Monetary assets and
liabilities by applying the exchange rates at the balance sheet date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, 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 Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Revenues, costs and
expenses, except those arising from non-monetary assets or liabilities that are translated using the historical exchange rate for
the related non-monetary asset or liability, at the dates of the transactions exchange rate. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 78pt; text-align: justify">Translation differences were carried
directly to the consolidated statement of comprehensive income as part of the income (loss) of the year under the caption foreign
exchange gain (loss). For the year ended December 31, 2012, the Company recognized a loss of $&nbsp;444,440 (gain of $&nbsp;813,146
during 2011).</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Relevant exchange rates used in
the preparation of the consolidated financial statements were as follows (Mexican pesos per one U.S. dollar):</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 57%; padding-right: -2.5pt; padding-left: 5.4pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Current exchange rate as of December 31, 2012</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12.99</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2.5pt; padding-left: 5.4pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Current exchange rate as of December 31, 2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">13.99</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2.5pt; padding-left: 5.4pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Current exchange rate as of January 1, 2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12.36</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2.5pt; padding-left: 5.4pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Weighted average exchange rate for the year ended December 31, 2012</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">13.17</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: -2.5pt; padding-left: 5.4pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Weighted average exchange rate for the year ended December 31, 2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12.49</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">b.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Business combinations </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B>
</B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">Acquisitions of businesses are accounted for
using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated
as the sum of the acquisition-date fair values of the assets transferred by the Company, liabilities incurred by the Company to
the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related
costs are generally recognized in profit or loss as incurred.</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify"></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At the acquisition date, the identifiable
assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date, except that:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred tax assets
or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with
IAS 12, <I>Income Taxes,</I> and IAS 19, <I>Employee Benefits,</I> respectively.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Assets (or disposal
groups) that are classified as held for sale in accordance with IFRS 5, <I>Non-</I>current<I> Assets Held for Sale and Discontinued
Operations,</I> are measured in accordance with that Standard.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Any excess of the cost of acquisition
over the Group's interest in the net fair value of the assets, liabilities and contingent liabilities of the associated company
recognized at the date of acquisition is recognized as goodwill. Goodwill included in the carrying amount of the investment and
is assessed for impairment as part of the investment. Any excess of the Group's interest in the net fair value of the assets, liabilities
and contingent liabilities over the cost of acquisition, after the reassessment, is immediately recognized in earnings.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Non-controlling interests that
are present ownership interests and entitle their holders to a proportionate share of the entity&rsquo;s net assets in the event
of liquidation may be initially measured on a transaction-by-transaction basis at fair value or at the non-controlling interest
proportionated &#9;to the fair value of the entity identifiable net assets.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">When the consideration transferred
by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement,
the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred
in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that
arise from additional information obtained during the &lsquo;measurement period&rsquo; (which cannot exceed one year from the acquisition
date). All other subsequent adjustments are recognized in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The subsequent accounting for
changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how
the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent
reporting dates and its subsequent settlement is accounted for within equity. Contingencies classified as assets or liabilities
are remeasured at subsequent reporting dates in accordance with IAS 37, <I>Provisions, Contingent Liabilities and Contingent Assets</I>,
as appropriate, with the corresponding gain or loss being recognized in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">When a business combination is
achieved in stages, the Company&rsquo;s previously held equity interest in the acquiree is remeasured to fair value at the acquisition
date (i.e. the date when the Company obtains control) and the resulting gain or loss, if any, is recognized in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive
income (loss) are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">If the initial accounting for
a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional
amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period,
or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed
at the acquisition date that, if known, would have affected the amounts recognized at that date.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Cash
and cash equivalents </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B>
</B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cash consists of deposits in bank accounts that do not generate
interest. Cash equivalents consists in temporary investments refer to short-term fixed income investments whose original maturity
is less than three months. These investments are expressed at cost plus accrued yields. The value so determined approximates their
fair value.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Allowances
for doubtful accounts</I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"> &ndash;</FONT></I><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B>
</B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">The Company follows the practice of recording
an estimation of an allowance for doubtful accounts, which is determined by considering the balances of clients with more than
a year old, those in litigation and or specific recovery problems. Actual results may differ materially from these estimates in
the future.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Inventories
and cost of sales </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B>
</B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Inventories are stated at the lower of cost and net realizable
value. Costs of inventories are determined on an average cost basis. Net realizable value represents the estimated selling price
for inventories less all estimated costs of completion and costs necessary to make the sale.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The Company classifies inventory
of raw materials in the consolidated statements of financial position based on its expected consumption date, presenting as long-term
inventories those which in accordance with historical data and production trends will not be consumed in the short-term (one year).</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The Company classified as long
term inventory parts and rollers, according to historical data and trends will not be consumed in the short-term.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The Company follows the practice
of providing a reserve for slow-moving inventory, considering the total of products and raw materials with a turnover above one
year.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Property</I></B></FONT><B><FONT STYLE="font-family: Trebuchet MS, Times, Serif">,
<I>plant and equipment</I> <FONT STYLE="color: black"><I>&ndash;</I></FONT> </FONT></B><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="color: #1A171B">Property</FONT>,
plant and equipment are<B> r</B>ecorded at acquisition cost, less any recognized impairment loss. Cost includes all expenses related
with acquisition and installation and, for qualifying assets, borrowing costs capitalized in accordance with the Company&rsquo;s
accounting policy. Depreciation is recognized so as to write off the cost of assets (other than land and properties under construction)
less their residual values over their useful lives, using the straight-line method, and commences when the assets are ready for
their intended use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">An item of property, plant and equipment
is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any
gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 2.5pt 0 56.7pt; text-align: justify">The estimated useful lives of the
Company&rsquo;s main assets are as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 72%">&nbsp;</TD>
    <TD STYLE="width: 28%; border-bottom: windowtext 1pt solid; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Years</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Buildings</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10 to 65</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Machinery and equipment</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5 to 40</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Transportation equipment</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Furniture, mixtures and computer equipment</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3 to 10</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">g.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Leases</I></B></FONT><B><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">
</FONT></I></B><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><FONT STYLE="color: black">&ndash;</FONT><B> </B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Leases
are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee. All other leases are classified as operating leases.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Operating lease payments are
recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative
of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases
are recognized as an expense in the period in which they are incurred.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">In the event that lease incentives
are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives
is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative
of the time pattern in which economic benefits from the leased asset are consumed.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">h.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Borrowing</I></B>
<B><I>costs</I></B> <FONT STYLE="color: black"><I>&ndash;</I></FONT> Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for
their intended use or sale.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Investment income earned on the
temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalization.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">All other borrowing costs are
recognized in profit or loss in the period in which they are incurred.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">i.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Intangible assets
&ndash; </I></B>Intangible assets with definite useful lives that are acquired separately are carried at cost, less accumulated
amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful
lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any
changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired
separately are carried at cost less accumulated impairment losses.<B><I> </I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Expenditure on research activities
is recognized as an expense in the period in which it is incurred.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">An internally-generated intangible
asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the
following have been demonstrated:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The technical feasibility
of completing the intangible asset so that it will be available for use or sale.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The intention to complete
the intangible asset and use or sell it.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The ability to use
or sell the intangible asset.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">How the intangible
asset will generate probable future economic benefits</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The availability of
adequate technical, financial and other resources to complete the development and to use or sell the intangible asset and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The ability to measure
reliably the expenditure attributable to the intangible asset during its development.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The amount initially recognized
for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first
meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure
is recognized in profit or loss in the period in which it is incurred. Subsequent to initial recognition, internally-generated
intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible
assets that are acquired separately.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Intangible assets acquired in
a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition
date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination
are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that
are acquired separately.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">An intangible asset is derecognized
on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition
of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are
recognized in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">j.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Goodwill &ndash;
</I></B>Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business
less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Company&rsquo;s
cash-generating units that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill
has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired.
If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on
the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit
or loss on disposal.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">k.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Impairment of
tangible and intangible assets other than goodwill &ndash; </I></B>At the end of each reporting period, the Company reviews the
carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis
of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least
annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to
its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently
reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately
in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss
is treated as a revaluation increase.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">l.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Provisions</I></B>
&ndash; <FONT STYLE="color: #1A171B">Provisions are recognized when the Company has a present obligation (legal or constructive)
as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. </FONT></FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">The amount recognized
as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking
into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount is the present value of those cash flows.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">m.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Employee benefits
</I></B><I><FONT STYLE="color: black">&ndash;</FONT><B> </B></I>The costs of direct benefits and defined contribution retirement
benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">The retirement benefit liability is
determined based on the present value of the defined benefit obligation at the date of the statement of financial position. Any
compensation included in the determination of the liability premiums corresponds to seniority premiums for retirement.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">Actuarial gains and losses are recognized
on profit or loss of the year. The retirement benefit liability and the related net cost of the period are determined under the
projected unit credit method based on projected salaries using for this purpose, certain assumptions determined by independent
actuaries.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">Liabilities for employee benefits recognized
in the consolidated statement of financial position represent the present value of the defined benefit obligation.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">n.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Earnings per
share </I></B><I><FONT STYLE="color: black">&ndash;</FONT></I><B> </B>Income per share is calculated by dividing controlling net
income, by the weighted average shares outstanding during each year presented.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">o.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Income taxes</I></B><I>
&ndash; </I><FONT STYLE="color: #1A171B">Income taxes represents the sum of the tax currently payable and deferred tax.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Current tax</I></B>
&ndash; Income taxes, calculated as the higher of the regular Mexican Income Tax (ISR) or the Business Flat Tax (IETU), are recorded
in the results of the year in which they are incurred. The tax currently payable is based on taxable profit for the year and cash
flows of each year respectively. Taxable profit differs from profit as reported in the statements of comprehensive income because
it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never
taxable or deductible. The Company&rsquo;s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted at the balance sheet date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Deferred tax</I></B>
&ndash; The Company, based on its financial projections, determines whether it expects to incur ISR or IETU in the future and recognized
deferred tax corresponding to the tax it will pay. Deferred tax is recognized on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit or loss, and
it is accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences,
and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities
are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 78pt; text-align: justify">The carrying amount of deferred
tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 78pt; text-align: justify">Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized,
based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The effects of changes
in the statutory rates are accounted for in the period that includes the enactment date. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date,
to recover or settle the carrying amount of its assets and liabilities.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 78pt; text-align: justify">Deferred tax assets and liabilities
are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities
on a net basis.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 78pt; text-align: justify">The Company follows the practice
of recognizing the benefit from the amortization of acquired tax losses in current earnings that are amortized, except when these
losses come by overspending and considers that these will be amortized over the coming years.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Current and
deferred tax for the period</I></B> &ndash; Current and deferred tax are recognized as an expense or income in profit or loss,
except when they relate to items that are recognized in other comprehensive income (loss) or directly in equity, in which case,
the current and deferred tax are also recognized inn other comprehensive income (loss) or directly in equity, respectively. Or
when it arises from initial recognition of a business combination.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Interests on
recoverable tax balances</I></B> &ndash; Interest on recoverable tax balances are presented in the consolidated statements of comprehensive
income as interest income.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">p.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Foreign currencies
&ndash; </I></B>In preparing the financial statements of each individual group entity, transactions in currencies other than the
entity&rsquo;s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates
prevailing at that date. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Exchange differences on monetary
items are recognized in profit or loss in the period in which they arise except for:</P>


<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included
in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.</FONT></TD></TR></TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Exchange differences
on transactions entered into in order to hedge certain foreign currency risks and <FONT STYLE="font-family: Trebuchet MS, Times, Serif"></FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Exchange differences
on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur
(therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive
income and reclassified from equity to profit or loss on sell all or part of the net investment.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">q.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Financial instruments
&ndash; </I></B>Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual
provisions of the instrument.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify">Financial assets and financial liabilities
are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial
assets and financial are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognized immediately in profit or loss.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">r.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Financial assets
&ndash; </I></B>Financial assets are classified into the following specified categories: &ldquo;financial assets at fair value
through profit or loss&rdquo;, &ldquo;held-to-maturity investments&rdquo;, &ldquo;available-for-sale financial assets&rdquo; and
&ldquo;loans and receivables&rdquo;. The classification depends on the nature and purpose of the financial assets and is determined
at the time of initial recognition. All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the time frame established by regulation or convention in the marketplace. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The effective interest method
is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid
or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through
the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Company does not have financial
assets classified as &ldquo;financial assets at fair value through profit or loss&rdquo;, nor &ldquo;available-for-sale financial
assets&rdquo;.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market. Loans and are measured at amortized
cost using the effective interest method, less any impairment.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Financial assets are assessed
for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is
objective evidence that, &#9;as a result of one or more events that occurred after the initial recognition of the financial asset,
the estimated future cash flows of the investment have been affected.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Objective evidence of impairment
could include:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Significant financial
difficulty of the issuer or counterparty; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Breach of contract,
such as a default or delinquency in interest or principal payments; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">It becoming probable
that the borrower will enter bankruptcy or financial re-organization; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The disappearance
of an active market for that financial asset because of financial difficulties.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">For certain categories of financial
assets, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment
on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Company&rsquo;s past experience
of collecting payments, as well as observable changes in national or local economic conditions that correlate with default on receivables.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">For financial assets carried at
amortized cost, the amount of the impairment loss recognized is the difference between the asset&rsquo;s carrying amount and the
present value of estimated future cash flows, discounted at the financial asset&rsquo;s original effective interest rate.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The carrying amount of the financial
asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying
amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
Changes in the carrying amount of the allowance account are recognized in profit or loss.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Except for equity instruments
available for sale, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit
or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the
amortized cost would have been had the impairment not been recognized.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Company derecognizes a financial
asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest
in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes
a collateralized borrowing for the proceeds received.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On derecognition of a financial
asset in its entirety, the difference between the asset&rsquo;s carrying amount and the sum of the consideration received and receivable
and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized
in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On derecognition of a financial
asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset or retains
a residual interest that does not result in the retention of substantially all the risks and rewards of ownership and the Company
retains control), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognize
under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the
date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum
of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized
in other comprehensive income is recognized in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">s.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Financial liabilities
&ndash; </I></B>Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity
in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Financial liabilities are classified as either financial liabilities &ldquo;at fair value through profit or loss&rdquo; or &ldquo;other
financial liabilities&rdquo;. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Financial liability <FONT STYLE="color: windowtext">at
fair value with changes through profit or loss</FONT> is a financial liability classified as held for trading or it is designated
as at <FONT STYLE="color: windowtext">fair value with changes through profit or loss</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">A financial liability is classified
as held for trading if:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">It has been acquired
principally for the purpose of repurchasing it in the near term; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On initial recognition
it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern
of short-term profit-taking; or </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">It is a derivative
that is not designated and effective as a hedging instrument.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">A financial liability
other than a financial liability held for trading may be designated as at fair value through profit or loss upon initial recognition
if:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Such designation eliminates
or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or </FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The financial liability
forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on
a fair value basis, in accordance with the Company&rsquo;s documented risk management or investment strategy, and information about
the grouping is provided internally on that basis; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">It forms part of a
contract containing one or more embedded derivatives, and IAS 39, <I>Financial Instruments: Recognition and Measurement,</I> permits
the entire combined contract (asset or liability) to be designated as at fair value through profit or loss.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Financial liabilities at fair
value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or
loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is included
in the &lsquo;other gains and losses' line item in the consolidated statement of comprehensive income.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Other financial liabilities including
borrowings are subsequently measured at amortized cost using the effective interest method. The effective interest method is a
method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the
financial liability, or (where appropriate a shorter period), to the net carrying amount on initial recognition.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Company derecognizes financial
liabilities when, and only when, the Company&rsquo;s obligations are discharged, cancelled or they expire. The difference between
the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">t.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Derivative financial
instruments &ndash; </I></B>The Company uses 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.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">These derivatives are initially
recognized at fair value at the date the derivative contracts are entered into and subsequently are remeasured to the fair value
at the end of reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is
designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the
nature of the hedge relationship.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">To mitigate the risks associated
with changes in natural gas prices occurring naturally as a result of the supply and demand on international markets, the Company
uses 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 operating cost.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At the inception of the hedge
relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management
objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing
basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows
of the hedged item attributable to the hedged risk.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The effective portion of changes
in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income
and accumulated under the heading of <I>fair value of derivative financial instruments, </I>net of the corresponding deferred income
taxes. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the
cost of sales line item.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">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. 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%.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Amounts previously recognized
in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item
is recognized in profit or loss, in the same line of the consolidated statement of comprehensive income as the recognized hedged
item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability,
the gains and losses previously recognized in other comprehensive income and accumulated in equity are transferred from equity
and included in the initial measurement of the cost of the non-financial asset or non-financial liability.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Hedge accounting is discontinued
when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or
when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in
equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss.
When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in
profit or loss.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">u.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Revenue recognition</I>
</B><FONT STYLE="color: black"><I>&ndash;</I></FONT><B> </B>Revenue is measured at the fair value of the consideration received
or receivable and is recognized in the period in which the Company transfers the risks and benefits of inventories to customer
who purchased them, which usually coincides 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.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">v.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Segments Information</I>
</B><FONT STYLE="color: black"><I>&ndash;</I></FONT><B> </B>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.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>6.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Critical accounting
judgments and key sources of estimation uncertainty</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">In the application of the <FONT STYLE="color: #1A171B">Company</FONT>&rsquo;s
accounting policies, which are described in Note 5, management is required to make judgments, estimates and assumptions regarding
the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate
is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects
both current and future periods.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 8.5pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: normal 10pt Trebuchet MS, Times, Serif; color: windowtext">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: windowtext"><B><I>Critical
                                                                                                                                                       accounting
                                                                                                                                                       judgments
                                                                                                                                                       </I></B></FONT><FONT STYLE="font: normal 10pt Trebuchet MS, Times, Serif">&ndash;
                                                                                                                                                       </FONT><FONT STYLE="font: normal 10pt Trebuchet MS, Times, Serif; color: windowtext">The
                                                                                                                                                       following
                                                                                                                                                       are
                                                                                                                                                       the
                                                                                                                                                       critical
                                                                                                                                                       judgments,
                                                                                                                                                       apart
                                                                                                                                                       from
                                                                                                                                                       those
                                                                                                                                                       involving
                                                                                                                                                       estimations,
                                                                                                                                                       that
                                                                                                                                                       the
                                                                                                                                                       management
                                                                                                                                                       have
                                                                                                                                                       made
                                                                                                                                                       in
                                                                                                                                                       the
                                                                                                                                                       process
                                                                                                                                                       of
                                                                                                                                                       applying
                                                                                                                                                       the
                                                                                                                                                       Company&rsquo;s
                                                                                                                                                       accounting
                                                                                                                                                       policies
                                                                                                                                                       and
                                                                                                                                                       that
                                                                                                                                                       have
                                                                                                                                                       the
                                                                                                                                                       most
                                                                                                                                                       significant
                                                                                                                                                       effect
                                                                                                                                                       on
                                                                                                                                                       the
                                                                                                                                                       amounts
                                                                                                                                                       recognized
                                                                                                                                                       in
                                                                                                                                                       the
                                                                                                                                                       financial
                                                                                                                                                       statements:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 10pt; color: windowtext">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: windowtext"><B><I>Functional
currency</I></B> </FONT><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><I>&ndash;</I><FONT STYLE="color: windowtext"> The
Company&rsquo;s management has evaluated all the indicators that in its opinion are relevant and has concluded that the Company&rsquo;s
functional currency is the Mexican Peso.</FONT></FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 8.5pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: normal 10pt Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: windowtext"><B><I>Key
                                                                                                                                    sources
                                                                                                                                    of
                                                                                                                                    estimation
                                                                                                                                    uncertainty
                                                                                                                                    </I></B></FONT><I><FONT STYLE="font: normal 10pt Trebuchet MS, Times, Serif">&ndash;
                                                                                                                                    </FONT></I><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><FONT STYLE="font-style: normal; color: windowtext">The
                                                                                                                                    </FONT></FONT><FONT STYLE="font: normal 10pt Trebuchet MS, Times, Serif">following
                                                                                                                                    are
                                                                                                                                    the
                                                                                                                                    key
                                                                                                                                    assumptions
                                                                                                                                    concerning
                                                                                                                                    the
                                                                                                                                    future,
                                                                                                                                    and
                                                                                                                                    other
                                                                                                                                    key
                                                                                                                                    sources
                                                                                                                                    of
                                                                                                                                    estimation
                                                                                                                                    uncertainty
                                                                                                                                    at
                                                                                                                                    the
                                                                                                                                    balance
                                                                                                                                    sheet
                                                                                                                                    date,
                                                                                                                                    that
                                                                                                                                    have
                                                                                                                                    a
                                                                                                                                    significant
                                                                                                                                    risk
                                                                                                                                    of
                                                                                                                                    causing
                                                                                                                                    a
                                                                                                                                    material
                                                                                                                                    adjustment
                                                                                                                                    to
                                                                                                                                    the
                                                                                                                                    carrying
                                                                                                                                    amounts
                                                                                                                                    of
                                                                                                                                    assets
                                                                                                                                    and
                                                                                                                                    liabilities
                                                                                                                                    within
                                                                                                                                    the
                                                                                                                                    following
                                                                                                                                    financial
                                                                                                                                    year.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Allowance for
doubtful accounts</I></B> &ndash; Management applies judgment at each balance sheet date to show the possible financial loss caused
by the inability of customers to make the corresponding payments. The Company calculates its allowance based on the accounts receivable
aging and other considerations for specific accounts. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Net realizable
value of inventory </I></B>&ndash;<B><I> </I></B>Management applies judgment at each balance sheet date to determine whether the
low moving inventory is impaired. Inventory is impaired when the carrying value is greater than the net realizable value.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Impairment of
long-lived assets in use</I></B> &ndash; Management applies judgment at each balance sheet date to determine whether the long-lived
assets in use are impaired. Long-lived assets in use are impaired when the carrying value is greater than the recoverable amount
and there is objective evidence of impairment. The recoverable amount is the present value of the future cash flows that will generate
during the remaining useful life.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Estimating useful
lives and residual values of furniture and equipment</I></B> &ndash; As described in Note 5, the Company reviews the estimated
useful life and residual values of property, plant and equipment at the end of each annual reporting period.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Impairment of
goodwill &ndash; </I></B>Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating
units to which goodwill has been allocated. The value in use calculation requires management to estimate the future cash flows
expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Contingencies</I></B>
<B><I>&ndash; </I></B>The Company is subject to transactions or contingent events for which it uses professional judgment in the
development of estimates of probability of occurrence. Factors that are considered in these estimates are the current legal situation
at the date of the estimate and, the opinion of the legal advisers.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Deferred income
tax assets &ndash; </I></B>The Company reviews the carrying amounts at the end of each reporting period and reduces deferred income
tax assets to the extent that it is no probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax assets to be utilized. However, there is no assurance that the Company will generate sufficient taxable profit to allow
all or part of its deferred income tax assets to be realized.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.4pt"></TD><TD STYLE="width: 24.6pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Valuation of
financial instruments &ndash;</I></B>As described in Note 15, the Company has certain types of financial instruments (gas swaps),
and uses valuation techniques that include inputs that are based on observable market data to estimate the fair value. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 74.7pt; text-align: justify">The Company&rsquo;s management
believes that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>7.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Cash and cash equivalents</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cash</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">881,732</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,226,871</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">769,399</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cash equivalents</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,220,582</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,310,217</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,615,518</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8,102,314</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,537,088</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,384,917</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>8.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Accounts receivable
&ndash; Net</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The average credit period on
sales of goods is 60 days. No interest is charged on trade receivables. The Company has recognized an allowance for doubtful debts
to show the possible financial loss caused by the inability of customers to make the corresponding payments. Allowances for doubtful
debts are calculated based on several factors including price adjustments, likelihood of recovery, aging and past default experience.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Credit limits and scoring by
customer are reviewed twice a year. There are no customers who represent more than 5% of the total balance of trade receivables.
The Company does not hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset
against any amounts owed by the Company to the counterparty.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Trade receivables disclosed
below include amounts that are past due at the end of the reporting period for which the Company has not recognized an allowance
for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable.
The Company does not hold any collateral.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Age of receivables that are
past due but not impaired is as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30 - 60 days</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">104,851</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">142,457</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">154,434</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">61 - 90 days</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">81,901</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">21,111</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">49,808</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">91 + days</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22,323</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">34,094</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">76,775</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">209,075</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">197,662</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">281,017</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">During the years
ended December 31, 2012 and 2011, the movement in the allowance for doubtful accounts was as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balance at beginning of year</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">207,998</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">182,313</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Provisions</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,481</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">37,711</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Writes off </FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(27,610)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,102)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Recoveries</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(14,293)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(25,446)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Translations effects</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(7,920)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">14,522</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balance at end of year</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">159,656</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">207,998</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">In determining the unrecoverability
of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the date credit was
initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer
base is large and unrelated.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Additionally, Republic recorded
reserves for potential rebates that may grant to its customers. These reserves are based upon volume or sales value of tons shipped.
Republic maintained allowances for claims to provide for estimated claims resulting from possible defects in products produced.
This allowance is based on an estimate of the value of actual claims made by customers and historical experience. <FONT STYLE="color: #1A171B">The
movement in this reserve as of the years ended on December 31, 2012 and 2011 was as follows:</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Beginning Balance</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">56,700</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">54,942</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Provisions</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">172,046</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">151,263</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Writes off</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(149,798)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(156,750)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 9.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Translations effects</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(4,084)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,245</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balance at end of year</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">74,864</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">56,700</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>9.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Recoverable taxes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Valued added tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">190,626</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">291,693</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">562,746</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">111,897</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">181,836</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">81,562</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Business flat tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">21,536</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,159</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">33,674</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">324,059</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">500,688</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">677,982</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>10.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Inventories</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 24.8pt; padding-left: 3.55pt; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Finished goods</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,355,505</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,298,768</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,906,119</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 24.8pt; padding-left: 3.55pt; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Work in process</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">73,074</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">67,318</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">199,215</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 24.8pt; padding-left: 3.55pt; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Billet</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,474,225</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,381,204</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,447,574</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 24.8pt; padding-left: 3.55pt; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Raw materials and supplies</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,558,813</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,470,682</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,215,045</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 24.8pt; padding-left: 3.55pt; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Materials, spare parts and rollers</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">669,635</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">640,794</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">363,885</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-indent: -3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,131,252</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,858,766</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,131,838</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 10.65pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 24.8pt; padding-left: 3.55pt; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Reserve for valuation at cost or net realizable value</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(87,682)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(130,924)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(3,808)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify; text-indent: 15.85pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,043,570</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,727,842</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,128,030</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify; text-indent: 15.85pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Materials in transit</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">190,646</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30,185</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">88,647</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,234,216</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,758,027</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,216,677</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2012 and 2011,
the Company has inventory of raw materials (Coke) which due to low production at the Republic plant has not been used in the past
4 years. Accordingly, such raw materials have <FONT STYLE="color: black">been</FONT> classified as long-term inventory. The amount
at this date, included in long-term inventories, totaled $&nbsp;1,544,559 and $&nbsp;1,651,875, respectively. In addition, the
Company has recorded a provision to lower of cost or market of this inventory of $&nbsp;710,976 and $&nbsp;765,848 at December
31, 2012 and 2011, respectively, to value them at their net realizable value.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">On December 28, 2012, the Company
entered into a purchase agreement with Proyectos Comerciales El Ninzi, S.A. de C.V. (stockholder of ICH) to sell 261,000 short
tons of (Coke) (short tons are equivalent to 907.18474 kilos). Through this contract, the buyer is obligated to purchase those
tons in a period no longer than two years, without any liability if not acquired. The sale price will be USD$ 450 per short ton,
for a total of USD$&nbsp;117.4 million. The net realizable value used for valuing inventory of Coke at December 31, 2012 was determined
based on the price agreed in this contract.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>11.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Property, plant
and equipment (In millions of pesos)</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Cost of property, plant and equipment
is as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: 2.9pt; padding-left: 2.9pt; text-align: center; text-indent: -2.9pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Land</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Buildings</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 2.9pt; padding-left: 2.9pt">
        <P STYLE="font: bold 9pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">Machinery and</P>
        <P STYLE="font: bold 9pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">equipment</P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Transportation
    equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Furniture,
    mixtures and computer equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Construction
    in-progress</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; padding-right: 2.9pt; padding-left: 2.9pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.55pt; font: 9pt Arial, Helvetica, Sans-Serif; text-indent: -0.1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 8%; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Balance as of January 1, 2011</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">815&nbsp;</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">2,985</FONT>&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">12,963&nbsp;</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">106</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">128</FONT>&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">487&nbsp;</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">17,484</FONT>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Acquisitions</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">137&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">200</FONT>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">93&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">32</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">462&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Disposals</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(17)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(33)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(1)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(51)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Transfer</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">415&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(415)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">-</FONT>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 9pt; text-indent: -7.05pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Translations effects</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">13&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">39&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">347&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">3</FONT>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">6&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">408&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Balance as of December 31, 2011</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">948&nbsp;</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">3,224</FONT>&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">13,785&nbsp;</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">138</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">130</FONT>&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">78&nbsp;</FONT></TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">18,303</FONT>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 9pt; text-indent: -7.05pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Acquisitions</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">833&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">20</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">6</FONT>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">445&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">1,304</FONT>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 9pt; text-indent: -7.05pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Translations effects</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(7)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(84)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(152)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">(243)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Balance as of December 31, 2012</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">941&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">3,140&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">14,466&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">158</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">136&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">523&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">19,364&nbsp;</FONT></TD></TR>
</TABLE>

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    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; padding-bottom: 6pt; 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 -->28<!-- 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>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Accumulated depreciation of property,
plant and equipment is as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 9.5pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Buildings</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Machinery and <BR>equipment</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Transportation<BR>equipment</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; font-weight: bold; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Furniture, mixtures and computer equipment</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; font-weight: bold; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 2.9pt">&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: 35%; font-family: Trebuchet MS, Times, Serif; text-indent: -4.2pt; padding-left: 4.2pt">Balance as of January 1, 2011</TD><TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="width: 9%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">808</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="width: 9%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">7,304</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="width: 9%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">45</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="width: 9%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">52</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="width: 9%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">8,209</TD><TD STYLE="width: 1%; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 4.2pt">&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-family: Trebuchet MS, Times, Serif; text-align: left; padding-left: 4.2pt">Depreciation expense</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">44</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">550</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">2</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">1</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">597</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; padding-left: 4.2pt">Disposal of assets</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">(19</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">)</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 STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">(19</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 11.25pt">Translations effects</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">3</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">166</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">1</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">170</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Trebuchet MS, Times, Serif; color: windowtext; text-indent: -4.2pt; padding-left: 4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">Balance</FONT><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: windowtext"> as of </FONT><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">December</FONT><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif; color: windowtext"> 31, 2011</FONT></TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">855</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">8,001</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">47</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">54</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">8,957</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 4.2pt">&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-family: Trebuchet MS, Times, Serif; text-align: left; padding-left: 4.2pt">Depreciation expense</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">21</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">686</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">5</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">3</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext">&nbsp;</TD>
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">715</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Trebuchet MS, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -7.05pt; padding-left: 11.25pt">Translations effects</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">(17</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left; border-bottom: Black 1pt solid">)</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">(67</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left; border-bottom: Black 1pt solid">)</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">(84</TD><TD STYLE="padding-bottom: 1pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 2.5pt; text-indent: -4.2pt; padding-left: 4.2pt">Balance as of December 31, 2012</TD><TD STYLE="font-family: Trebuchet MS, Times, Serif; color: windowtext; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">859</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">8,620</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">52</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">57</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: right">9,588</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Trebuchet MS, Times, Serif; color: windowtext; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: 2.9pt; padding-left: 2.9pt; text-align: center; text-indent: -2.9pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Land</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Buildings</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 2.9pt; padding-left: 2.9pt">
        <P STYLE="font: bold 9pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">Machinery and</P>
        <P STYLE="font: bold 9pt Trebuchet MS, Times, Serif; margin: 0; text-align: center">equipment</P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Transportation
    equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Furniture,
    mixtures and computer equipment</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Construction
    in-progress</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; padding-right: 2.9pt; padding-left: 2.9pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.55pt; font: 9pt Arial, Helvetica, Sans-Serif; text-indent: -0.1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 8%; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 9pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif"><B>Net Book Value </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Balance as of January 1, 2011</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">815</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">2,177</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">5,659</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">61</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">76</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">487</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">9,275</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 9pt; text-indent: -4.2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Balance as of December 31, 2011</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">948</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">2,369</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">5,784</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">91</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">76</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">78</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">9,346</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -30.35pt; padding-left: 4.2pt; text-indent: -4.2pt">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif">Balance as of December 31, 2012</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">941</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">2,281</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">5,846</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">106</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">79</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">523</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; font: 9pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font: 9pt Trebuchet MS, Times, Serif; color: windowtext">9,776</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">On November 16, 2011, Republic
Steel announced that it has plans to invest up to USD$&nbsp;85.2 million (unaudited) in an electric arc furnace and associated
equipment at its steelmaking facility in Lorain, Ohio, to meet growing customer demand for the Company's SBQ steel. The location
was chosen for its proximity to customers and its skilled workforce. The investment will also enable production of bloom cast for
the production of SBQ bar and the production of seamless tube rounds. Construction of the Lorain electric arc furnace began mid-year
2012 and is scheduled to begin steelmaking operations in mid-2013. During 2012, the Company&rsquo;s capital expenditures relating
to the electric arc furnace were USD$&nbsp;17.5 million. Total expenditures for 2013 are expected to be USD$&nbsp;59.5 million
(unaudited).</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>12.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Intangible and
other noncurrent assets</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The balances as of December 31,
2012 and 2011 are as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="9" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Amortization</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>period</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>(years)</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Assets</B></FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Original</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>value</B></P></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; border-bottom: Black 1pt solid">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Accumulated</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>amortization</B></P></TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Net</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Recorded trade mark of Republic</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">69,959</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">69,959</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Kobe Tech contract</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">81,531</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">50,391</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">31,140</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">12</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Customers list</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">42,707</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt; border-bottom: Black 1pt solid"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">15,838</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">26,869</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-top: 6pt; padding-right: -3.5pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total from Republic (1)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">194,197</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">66,229</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">127,968</FONT></TD>
    <TD STYLE="padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 6pt; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Customers list</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,205,700</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,123,274</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,082,426</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Non-compete contract</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">394,700</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">394,700</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">-</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Trademark San 42 (2)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">329,600</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">329,600</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Technological platform</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">8,800</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">8,067</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">733</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Goodwill (2)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,814,160</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,814,160</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total from Grupo San (3)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt; padding-right: 3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,752,960</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt; padding-right: 3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,526,041</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; padding-right: 3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,226,919</FONT></TD>
    <TD STYLE="padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 6pt; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,947,157</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt; padding-right: 3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,592,270</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,354,887</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Payments in advance to Machinery and equipment vendors (See Note 27)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">286,229</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">286,229</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Other assets</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">31,659</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">31,659</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">5,265,045</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,592,270</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,672,775</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 1px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 87px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 87px">&nbsp;</TD>
    <TD STYLE="width: 11px">&nbsp;</TD>
    <TD STYLE="width: 103px">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="9" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>January 1,</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>2 0 1 1</B></P></TD>
    <TD STYLE="border-bottom: Black 0pt solid"></TD></TR>
<TR>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Assets</B></FONT></TD>
    <TD COLSPAN="3" ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Original</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>value</B></P></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Accumulated</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>amortization</B></P></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Net</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; padding-right: -4.6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 0pt solid">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Net</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Recorded trade mark of Republic</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">75,352</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">75,352</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.1in; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">66,489</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Kobe Tech contract</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">87,818</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">46,952</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">40,866</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">39,586</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Customers list</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">46,001</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">14,760</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">31,241</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">28,694</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total from Republic (1)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">209,171</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">61,712</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">147,459</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">134,769</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.05in; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Customers list</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,205,700</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">878,196</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,327,504</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,572,582</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Non-compete contract</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">394,700</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">353,585</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">41,115</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">139,790</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Trademark San 42 (2)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">329,600</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">329,600</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">329,600</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Technological platform</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">8,800</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">6,307</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,493</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,253</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Goodwill (2)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,814,160</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,814,160</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,814,160</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total from Grupo San (3)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,752,960</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,238,088</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,514,872</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,860,385</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,962,131</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,299,800</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,662,331</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,995,154</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Payments in advance to Machinery and equipment vendors (See Note 27)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">42,070</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">42,070</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Other assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">77,448</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">77,448</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">84,604</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">5,081,649</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,299,800</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,781,849</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,079,758</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 1px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 87px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 13px">&nbsp;</TD>
    <TD STYLE="width: 87px">&nbsp;</TD>
    <TD STYLE="width: 11px">&nbsp;</TD>
    <TD STYLE="width: 18px">&nbsp;</TD>
    <TD STYLE="width: 85px">&nbsp;</TD>
    <TD STYLE="width: 0px">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">*</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Intangible assets
with undefined useful life.</FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Intangible assets
from Republic acquisition.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The trade mark San
42 and the goodwill its presented net of impairment losses recorded in 2009 for $16,000 and $&nbsp;2,352,000, respectively.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Intangible assets
from Grupo San acquisition.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The amortization of these assets
recorded in net income of the years ended December 31, 2012 and 2011 amounts to $&nbsp;297,022 and $&nbsp;354,098, respectively.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The other assets are not amortized
and they are primarily comprised of guarantee deposits.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>13.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Short-term debt</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 28.35pt; text-align: justify">On October 22, 1997 and August
17, 1998, the Company offered to holders of medium-term notes, of Simec, to exchange their bonds at par, for new bonds in denominated
senior subordinated notes. The new notes bear semi-annual interest each at an annual rate of 10.5% interest and principal repayments
were semiannual from May 15, 2000 until November 15, 2007. At December 31, 2012 and 2011, the amount of such new notes outstanding
totaled USD$&nbsp;.03 million, plus accrued interest. At December 31, 2012 and 2011, liabilities in pesos for the new notes outstanding
amounted to $&nbsp;3,922 and $&nbsp;4,225, respectively.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>14.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Trade accounts
payable and other accrued liabilities</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Trade accounts payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,330,479</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,294,701</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,162,801</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other accrued liabilities</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">497,793</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">535,743</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">588,469</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,828,272</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,830,444</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,751,270</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The average credit period on
purchases of certain goods is 30 to 60 days, from invoice date. The Company has financial risk management policies in place to
ensure that all payables are paid within the pre-agreed credit terms.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify"></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: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>15.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Derivative financial
instruments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company uses 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 consolidated statement of financial
position 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.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">In Mexico, as of December 31,
2012 and 2011, the Company has contracted natural gas swaps with PEMEX Gas and Petroqu&iacute;mica B&aacute;sica (PGBP). During
2011, Republic has contracted gas swaps with Hess Corporation.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The following table shows the
existing natural gas swap (hedges) as of December 31, 2012:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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 NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Date of </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>contract</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Starting </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>date</B></P></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Ending </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>date</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Type </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>swap</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Price </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>(USD$) /</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>MMBTU /</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>G. CAL</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Quantity</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Units</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Fair </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>value</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">06/01/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2013</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.60</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">90,500</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,101</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">06/01/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2013</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.60</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12,500</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">152</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">06/01/2012</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2013</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.60</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">21,500</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">261</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: -2.7pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,514</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: -2.7pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net liability booked in accounts payable</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">439</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: -2.7pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net derivative financial instruments liabilities</FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,075</FONT></TD></TR>
<TR>
    <TD STYLE="width: 18%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The following table shows the
existing natural gas swap as of December 31, 2011; qualified as cash flow hedging:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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 NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Date of </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>contract</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Starting </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>date</B></P></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Ending </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>date</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Type </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>swap</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Price </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>(USD$) /</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>MMBTU /</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>G. CAL</B></P></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Quantity</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Units</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Fair </B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>value</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10/09/2008</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8.33</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22,500</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10,953</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">29/10/2010</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4.50</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">80,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,211</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2/09/2008</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8.47</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,998</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4/11/2010</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4.50</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,500</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,051</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2/09/2008</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8.47</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,875</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,434</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4/11/2010</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/07/2011</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">D.S. Swap</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4.50</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">15,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,102</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22/11/2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/01/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31/01/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Future</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.57</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">527,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">354</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22/11/2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/01/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">29/02/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Future</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.59</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">493,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,132</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22/11/2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/01/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31/03/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Future</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.58</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">527,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,146</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22/11/2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/01/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/04/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Future</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.62</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">150,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,132</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22/11/2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/01/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31/05/2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Future</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.66</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">155,000</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,144</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22/11/2011</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1/01/2012</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30/06/2012</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Future</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3.71</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">150,000</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.1pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">MMBTU</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,105</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: -2.7pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">42,762</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: -2.7pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net liability booked in accounts payable</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,306</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: -2.7pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">&nbsp;&nbsp;&nbsp;Net derivative financial instruments liabilities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2.7pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">35,456</FONT></TD></TR>
<TR>
    <TD STYLE="width: 18%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Reconciliation of derivative
financial instruments during each year is as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balance at beginning of year</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">42,762</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">91,775</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Changes in fair value of natural gas swap contracts</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(41,248)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(49,013)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -30.35pt; padding-left: 3.95pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif; color: windowtext">Balance at end of year</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,514</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">42,762</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The cumulative deferred gain
or loss will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis
adjustment to the non-financial hedged item, consistent with the relevant accounting policy.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">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 income or loss in the following month.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify"></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">In the case of foreign operations,
gas swap contracts are also used to cover changes in the cost of natural gas. The contracts are usually no longer than one year.
At December 31, 2012, the Company had no active natural gas swap contracts related to its foreign operations.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>16.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Employee benefits</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><B><I>Mexican entities</I></B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">a.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Collective bargaining agreements </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">
For the Mexican operations, approximately 56% of the employees are under collective contracts. The Mexican collective contracts
expire in periods greater than one year.</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">b.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Seniority premium benefits</I></B> </FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><I>&ndash;</I></FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>
</B><FONT STYLE="color: #1A171B">In accordance with Mexican Labor Law, the Company provides seniority premium benefits to its employees
under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days wages for each year of service
(at the employee&rsquo;s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15
or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium
benefit. The obligations are calculated by independent actuaries using the projected unit credit method.</FONT></FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The most important assumptions
used for the purposes of the actuarial valuations related to seniority premium benefits were as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Discount rate</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6.50</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7.09</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Rate of salary increase</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6.24</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6.24</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0.5in">Components
of net cost of benefits plan to employees are as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Current service cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,578</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,977</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Financial cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,749</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,408</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Past service cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">882</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Anticipated reduction obligations</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(14)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(297)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Actuarial gains/losses recognized in the year</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,452</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,535)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,647</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,553</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The expense for the years 2012
and 2011 was recorded in:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cost of sales</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,523</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,670</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Administrative expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,124</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,883</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,647</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,553</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The amounts included in the consolidated
financial statements at December 31, 2012 and 2011 are $&nbsp;77,869 and $&nbsp;67,773 respectively, corresponding to the present
value of defined benefit obligation.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Movements in the present value
of the defined benefit obligation in the current year were as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Opening defined benefit obligation</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">67,773</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">63,075</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Current service cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,578</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,977</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Past service cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">882</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Financial cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,749</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,408</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Anticipated reduction obligations</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(14)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(297)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Actuarial gains/losses</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,452</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,535)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Benefits paid</FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,551)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,855)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Closing defined benefit obligation</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">77,869</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">67,773</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">c.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Severance benefits </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>
</B><FONT STYLE="color: #1A171B">The Company also provides statutorily mandated severance benefits to its employees terminated
under certain circumstances. Such benefits consist of a one-time payment of three months wages plus 20 days wages for each year
of service payable upon involuntary termination without just cause. Severance benefits payments are recorded directly in the consolidated
statement of comprehensive income in the moment in which are paid, unless they are related to restructuring expenses, which are
recorded when there is a present obligation from past events.</FONT></FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">d.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Employee profit sharing (EPS) </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>
</B><FONT STYLE="color: #1A171B">The Mexican Constitution and the Labor Law grant employees the right to receive a 10% share of
the employers&rsquo; profits. </FONT>Employees Profit Sharing is computed in similar terms to the taxable profit for income tax,
excluding the annual adjustment due to inflation and the inflation effects in tax depreciation. For the years 2012 and 2011 EPS
amounted to $&nbsp;173 and $&nbsp;0, respectively. EPS<FONT STYLE="color: #1A171B"> is recorded in the results of operations for
the year in which it is incurred.</FONT></FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">e.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Governmental defined contribution plan </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>
</B><FONT STYLE="color: #1A171B">Under Mexican legislation, the Company must make payments equivalent to 2% of its workers&rsquo;
daily integrated salary (ceiling) to a defined contribution plan that is part of the retirement savings system. The expense in
2012 and 2011 was $&nbsp;8,550 and $&nbsp;8,076, respectively.</FONT></FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify"><B><I>Foreign entities (Republic)</I></B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Republic is the only subsidiary
of the Company which offers other benefits and pension plans to their employees. These benefit plans to employees are described
below:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">a.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif; color: #1A171B">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Collective bargaining agreements </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;
</FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif">79% of the Company&rsquo;s employees are covered by a collective
bargaining agreement with the United Steelworkers of America (USW).</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">On March 29, &#9;2012, the USW
and Republic ratified a new agreement that expires on August 15, 2016.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Defined
contribution plans</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify"><FONT STYLE="color: #1A171B"><B><I>Pension
plan for </I></B></FONT><B><I><FONT STYLE="color: black">employees</FONT></I></B><I><FONT STYLE="color: black"> - </FONT></I>Republic
participates in the Steelworkers Pension Trust (SPT), a defined benefit multiemployer pension plan. The Company obligations to
the plan are based upon fixed contribution requirements. The Company contributes a fixed dollar amount of USD$&nbsp;1.68 per hour
for each covered employee&rsquo;s contributory hours, as defined under the plan.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Participation
in a multi-employer pension plan agreed to under terms of a collective bargaining agreement differs from a traditional
qualified single employer defined benefit pension plan. The SPT shares risks associated with the
plan in the following respects:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: justify"></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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Contributions to the
SPT by Republic may be used to provide benefits to employees of other participating employers; </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">If an participating
employer stops contributing to the SPT, the unfunded obligations of the plan may e borne by the remaining participating employers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">If the Company chooses
to stop participating in the SPT, Republic may be required to pay an amount based on the underfunded status of the plan, referred
to as a withdrawal liability.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Company contributions to the trust
for the periods ended December 31, 2012 and 2011 amounted to USD$&nbsp;5.7 million and USD$ 5.9 million, respectively.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify"><FONT STYLE="color: #1A171B"><B><I>VEBA
Benefit Plan </I></B><I>-</I></FONT> Republic is required to make quarterly contributions to the VEBA Benefit Trust as determined
by the terms of the USW collective bargaining agreement. The VEBA Benefit Trust is a welfare plan for USW retiree healthcare benefits,
and is not a &ldquo;qualified&rdquo; plan under ERISA regulations. During 2012, in accordance with terms of the new USW labor agreement,
no quarterly contributions were required prior to the 4th quarter of 2012. For the years ended December 31, 2012 and 2011, the
Company recorded expenses of USD$ 2.3 million and USD$ 8.5 million, respectively, related to this welfare plan.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The Company recorded combined
expenses of USD$ 8.1 million and USD$ 14.5 million for the years ended December 31, 2012 and 2011, respectively, related to the
funding obligations of the retirement healthcare and pension benefits.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"><FONT STYLE="color: #1A171B"><B><I>401
(k) Plan</I></B></FONT> - Republic has a defined contribution 401(k) 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 participant&rsquo;s
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% vested in both their and the Company&rsquo;s matching 401(k) contributions. For the years ended
December 31, 2012 and 2011, the Company recorded expense of USD$&nbsp;2.3 million and USD$&nbsp;2.1 million, respectively, related
to this defined contribution retirement plan.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Employees who are covered by
the USW labor agreement are eligible to participate in the defined contribution 401(k) 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 Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B><I>Profit
sharing plans </I></B></FONT><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black">&ndash;</FONT></I><I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B"><B>
</B></FONT></I><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">The labor agreement includes a profit sharing
plan to which the Republic is required to contribute 2.5% of its quarterly pre-tax income, as defined in the labor agreement. At
the end of each year, the contribution is based upon annual pre-tax income up to USD$&nbsp;50.0 million multiplied by 2.5%, USD$&nbsp;50.0
million to USD$&nbsp;100.0 million multiplied by 3.0%, and above USD$&nbsp;100.0 million multiplied by 3.5%, less the previous
payouts during the year. For the years ended December 31, 2012 and 2011, the Company recorded expense of USD$&nbsp;0.07 million
and USD$&nbsp;1.0 million, respectively.</FONT></TD></TR></TABLE>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The Company has
a profit sharing plan for all salaried and nonunion hourly employees that is based upon achieving target Earnings Before Interest,
Taxes, Depreciation, and Amortization (EBITDA) amounts. The Company paid USD$&nbsp;0.2 million under this plan during 2012 and
USD$&nbsp;0.3 million during 2011.</P>


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

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">During the 4th
quarter 2012, the Republic implemented a goals and objectives based incentive compensation plan in place of the salaried and nonunion
hourly employee profit sharing plan. The goals and objectives are measured on an annual and quarterly basis and paid in the month
following the end of the quarterly period except for annual awards that are paid during the following year upon completion of the
Company&rsquo;s annual audit. Awards under the plan are dependent upon the Company achieving a target EBITDA for the respective
period. During 2012, the Company did not exceed the target EBITDA and no awards were earned under the plan.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>17.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Income taxes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company is subject to Income
Tax (ISR) or Business Flat Tax (IETU).</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Grupo Simec S.A.B. de C.V. and
some of its subsidiaries consolidate their taxable income with its parent company Industrias CH. In accordance with the provisions
of the Income Tax Law, Industrias CH and each of its 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 CV and its subsidiaries calculate and book its provision for taxes on
a standalone basis.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">IETU is computed at the rate
of 17.5%. The tax base is determined by adding the revenues collected from the sale of goods, rendering of independent services
and the granting of use or enjoyment of goods, less certain deductions paid, including inventory purchases and capital expenditures.
The tax may be reduced with various credits related to wages and salaries, social security contributions, capital expenditures
deducted pending the entry into force of this Act, a part of inventories, among others, as well as the income tax effectively paid
in the year, so that the flat tax is paid only by the difference between the income tax and the business flat tax caused when the
latter is greater.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">With the entry into force of
the Business Flat Tax Law it repealed IMPAC Law and its third transitory Flat Tax Law establishes a new procedure to claim back
the tax on assets paid to recover the ten previous years, without that in no case exceed 10% of asset tax paid in 2005, 2006 and
2007. Based on these changes the Company has determined that the accumulated asset tax December 31, 2012 for $&nbsp;105,973 may
not be recoverable based on the prospective analysis of its results and which has been fully reserved.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">According to the Law on Income
Tax and the Revenue Act of the Federation, the rate for 2013 is 30%, in 2014 the rate will be 29% and from 2015 onwards will be
28%.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Based on its <FONT STYLE="color: black">financial</FONT>
projections for the next four years, and retrospectively on historical results, the Company determined that some subsidiaries of
the group will pay ISR, and some others IETU. The deferred income tax was determined in base of each tax rules.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The analysis of <FONT STYLE="color: black">the</FONT>
income tax charged (credited) to the results of 2012 and 2011 is as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-indent: -0.5in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-indent: -4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -6.5pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">ISR of the year of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">831&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -6.5pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(4,548)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">IETU of the year of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">433&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,945&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred ISR of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">63,029&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">366&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred IETU of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">45,396&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">180,465&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">ISR of the year of Foreign companies </FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -6.5pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(17,246)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -6.5pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(88,234)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred ISR of Foreign companies </FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -6.5pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(38,811)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">54,836&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 15.85pt; text-align: justify; text-indent: -4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Income taxes</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 13.85pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">53,632</FONT>&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 13.85pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">148,830&nbsp;</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify"><FONT STYLE="color: #1A171B">During
2012 and 2011, the income tax expense (benefit) attributable to income before income tax was </FONT><FONT STYLE="color: black">different</FONT><FONT STYLE="color: #1A171B">
</FONT><FONT STYLE="color: black">from</FONT><FONT STYLE="color: #1A171B"> the one that will result for applying 30% tax rate before
these provisions, as a result of the concepts shown below:</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Trebuchet MS, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; text-align: justify">Income tax expense at statutory rate</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">602,214</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">938,217</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Increase (decrease) as a result of:</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: justify">Inflation effects, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(41,909</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,729</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Effect between nominal rate from E.U.A. and M&eacute;xico</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,008</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,689</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Change in valuation of deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,666</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,492</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">IETU paid in excess of ISR and deferred IETU</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,829</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186,410</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Benefit from utilization of tax loss carryforward (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(813,292</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,021,174</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">Others, net (includes permanent items)</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">217,132</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">25,303</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt">Income tax expense</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">53,632</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">148,830</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt">Effective tax rate</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">2.7</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">4.8</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>


<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="color: #1A171B; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">These amounts correspond
to income tax benefit obtained by those companies that amortized tax loss carry-forwards prior to 2012 and 2011, respectively.
In 2012 includes $&nbsp;240,841 from applying part of tax losses from Orge, S.A. de C.V. See Note 3-b.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify"><FONT STYLE="color: #1A171B">The
</FONT><FONT STYLE="color: black">Company</FONT><FONT STYLE="color: #1A171B"> has tax losses carryforwards which, according to
the ISR law, can be utilized against taxable income generated in the next ten years. Tax loss carryforwards can be updated by following
certain procedures established in the law.</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify"><FONT STYLE="color: #1A171B">At
December 31, 2012, Grupo Simec, S.A.B. de C.V. and certain of its subsidiaries have tax loss </FONT><FONT STYLE="color: black">carry-forwards</FONT><FONT STYLE="color: #1A171B">
for which no deferred tax asset was recognized because there is no certainty that they will be amortized. These tax losses which
correspond to Mexican entities shown below:</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 28.35pt">&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 NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Origin </B></P>
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>date</B></P></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Settlement</B></P>
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>date</B></P></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Tax losses pending of amortization</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 26%; padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2004</FONT></TD>
    <TD NOWRAP STYLE="width: 5%; padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 30%; padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2014</FONT></TD>
    <TD STYLE="width: 6%; padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 5%; padding-right: 13.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="width: 23%; border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">234</FONT></TD>
    <TD STYLE="width: 5%; padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2005</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2015</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">25,624</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2006</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2016</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,152</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2007</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2017</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,511</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2008</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2018</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">41,232</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2009</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2019</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">200,898</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2010</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2020</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">515,106</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2011</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2021</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8,464,966</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><SUP>(1)</SUP></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.45pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2022</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,633,048</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><SUP>(2)</SUP></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 13.85pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10,891,771</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="color: #1A171B; 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: 28.35pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">As indicated in Note
3-j, in 2011, the Company had a tax loss on the sale of shares of $&nbsp;7,859,922 ($&nbsp;8,384,742 updated to December 31, 2012)
which, according to the Income Tax Law, can only be written off against tax profit on sale of shares to be generated in the future.
This loss is included as a balance within the loss carry-forwards.</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: 28.35pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">Includes
$ 1,460,011 of losses from Orge, S.A. de C.V. (See Note 3-b).</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">At December 31,
2012, Republic has USD$&nbsp;105.8 million of tax loss carryforwards for federal tax purposes, which expire between 2030 and 2032;
USD$&nbsp;210.2 million of tax loss carryforwards for state and local purposes that expire between 2013 and 2032 and approximately
USD$&nbsp;3.8 million of tax losses at the subsidiary located in Canada, which expire between 2030 and 2032. The tax effect of
these losses amounted to USD$&nbsp;45.4 million. The deferred tax assets not recognized because there is no certainty that will
applied against future profits amounted to $&nbsp;299,555 at December 31, 2012.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Below is a summary
of the effects of the main temporary differences comprising the deferred income tax liability is included in the consolidated statement
of financial position.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The primary <FONT STYLE="color: #1A171B">items</FONT>
originating a deferred ISR asset and liability are:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred tax assets:</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Allowance for doubtful accounts</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">37,758</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">63,826</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">59,154</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Provisions</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">157,111</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">172,827</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">167,269</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Advances from customers</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12,363</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">643</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">25,907</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Unrealized income tax loss carryforwards </FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">333,615</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">349,467</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">104,195</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Employee profit sharing provision</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">199</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">250</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">133,481</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Derivative financial instruments</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">454</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">13,429</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">99,610</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">13,645</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,612</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 39pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred tax assets</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">555,145</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">600,442</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">617,228</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred tax liabilities:</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Inventories</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">693,052</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">842,331</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">661,450</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,113,470</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,057,240</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,826,436</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Intangibles assets</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">418,394</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">510,214</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">607,453</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Prepaid expenses</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">21,108</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,888</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,133</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,285</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">138,751</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 39pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total deferred liabilities</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,246,024</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,417,958</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,240,223</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 39pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred ISR liability</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,690,879</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,817,516</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,622,995</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred IETU liability</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">276,762</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">231,366</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">50,901</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 39pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 39pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred tax liabilities, net</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,967,641</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,048,882</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 2.25pt double; padding-right: -3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,673,896</FONT></TD></TR>
<TR>
    <TD STYLE="width: 52%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>18.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Stockholders&rsquo; equity</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Common stock as of December 31, 2012 and
2011, and January 1, 2011 , is as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Number of shares</B></P>
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>(in thousands)</B></P></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Amount</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Fixed capital </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">90,851</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">441,786</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Variable capital</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">406,858</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,978,444</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">497,709</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,420,230</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Common stock consists of nominative
shares, fully subscribed, without nominal value. Variable capital may be increased without limitation.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Retained earnings
include the statutory legal reserve. The Mexican General Corporate Law requires that at least 5% of net income of the year be transferred
to the legal reserve until the reserve equals 20% of capital stock at par value (historical Mexican Pesos). The legal reserve may
be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced
for any reason. At December 31, 2012 and 2011, the legal reserve of the Company amounted to $&nbsp;484,045 (nominal pesos), representing
20% of nominal capital.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>19.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Non-controlling interest</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As mentioned in Note 5, Grupo
Simec, S.A.B. de C.V., owns practically 100% of the capital stock of its subsidiaries, except for SimRep Corporation and subsidiaries,
in which owns 50.22%. The non-controlling interest represents the equity in this USA subsidiary owned by minority shareholders,
and is presented in the consolidated statement of financial position after the controlling interest. The consolidated statement
of comprehensive income shows the total consolidated net income or loss and controlling and non-controlling interest portions are
presented after the consolidated net income or loss. Below is shown the changes for the years ended December 31, 2012 and 2011:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balance at beginning of year</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,165,989</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,837,272</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Share on net income for the year</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(116,234)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">86,746</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Share on translation effects of foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(198,057)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">241,971</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balance at end of year</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,851,698</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,165,989</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>20.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Transactions and balances with related
parties</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">Transactions with related
parties, carried out in the ordinary course of business, were as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 15%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Holding company</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Interest expense</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,742</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,474</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.15pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Agency personnel</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Administrative services expenditures</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">16,087</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">14,449</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 15.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Other related parties</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Sales</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">180,922</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">30,613</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Purchases</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">112,697</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">65,966</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Direct short-term benefits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">39,581</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31,120</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">Balances due from related
parties and due to related parties are as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 49%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Due from related parties:</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Industrias CH, S.A. B. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">110,590</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">104,207</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">112,952</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Compa&ntilde;&iacute;a. Laminadora Vista Hermosa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,732</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,029</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,854</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Operadora Construalco, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">880</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">483</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">321</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Ferrovisa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,084</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,755</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Compa&ntilde;&iacute;a Manufacturera de Tubos, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">39,943</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">263</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Operadora Industrial de Herramientas, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">864</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,423</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Joist del Golfo, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,033</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Perfiles Comerciales Sigosa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,777</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,625</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Others</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">155</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">191</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">118,002</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">169,018</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">126,145</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Due to related parties:</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Industrias CH, S.A.B. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">165,983</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">172,513</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">154,750</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Tuber&iacute;as Procarsa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">384,638</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">416,107</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">366,615</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Procarsa Tube and Pipe</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">38,777</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">41,665</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">13,251</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pytsa Industrial de Mexico, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">66,237</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">71,206</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">62,685</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Aceros y Laminados Sigosa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,825</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,825</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">19,099</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Perfiles y Comerciales Sigosa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,084</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Nueva Pytsa Industrial, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">611</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,520</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pytsa Industrial, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,097</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,154</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,985</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Joist del Golfo, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">975</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Compa&ntilde;&iacute;a Manufacturera de Tubos, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">57</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 12.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Others</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">934</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">915</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">687</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">662,134</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">706,385</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">629,676</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">As of December 31, 2012 and 2011,
the amount payable to Industrias CH, Tuber&iacute;as Procarsa, S. A. de C. V., Pytsa Industrial de Mexico, S. A. de C. V. and Aceros
y Laminados Sigosa, S.A. de C.V. comes from loans and are denominated in US dollars at indefinite term and bear annual interest
at 0.25%. Industries CH, S.A.B. account receivable correspond to balances of recoverable ISR from some of its subsidiaries that
consolidated for tax purposes. The others receivables and payable balances are generated by purchase and sale of finished goods
as part of the Company&rsquo;s normal operations.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>21.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Cost and expenses by nature</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 28.35pt; text-align: justify">At the years ended at December
31, 2012 and 2011, the cost of sales and administration expenses are as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Raw materials and consumables used</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12,459,505</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,935,418</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Electrical energy</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,990,177</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,876,784</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Ferroalloys</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,849,823</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,071,199</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Refractories</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">505,166</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">490,918</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Oxygen</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">203,740</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">207,597</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Electrodes</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">453,992</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">418,127</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Gas and combustibles </FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">637,104</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">894,237</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Labor</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,584,468</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,326,140</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Operation materials</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,089,056</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">762,807</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Depreciation and amortization</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,012,022</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">949,516</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Maintenance</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">723,739</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">714,087</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other expenses</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,679,694</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,966,611</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,188,486</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">26,613,441</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>22.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Other operating income (expense)</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">2 0 1 2</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">2 0 1 1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Balances depuration</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(67,414)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(49,000)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Land treatments in Pacific Steel, Inc.</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(8,161)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(14,000)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Machinery impairment</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(12,000)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(50,615)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other operating expenses</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(75,575)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(125,615)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Update and/ or tax returns </FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">19,169</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,909</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Litigation settlement, net (1)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">215,710</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other income</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">21,925</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other operating income</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">256,804</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,909</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 17.05pt; text-indent: -17.05pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other income (expenses), net</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">181,229</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(113,706)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">Grupo
Simec, S.A.B. had sued Grupo San vendors for certain missing inventory at the date of acquisition of that group, which was in 2008.
In 2012, the agreement between the parties and the trial was settled and the Company received as compensation $&nbsp;273,304 (USD$&nbsp;20
million). The amount of $ 215,710 net of litigation expenses related to this matter. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>23.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Financial instruments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Capital risk
management</I></B> <FONT STYLE="color: black"><B><I>&ndash;</I></B></FONT> The Company manages its capital to ensure that its subsidiaries
will be able to continue as a going concern while maximizing the return to stockholders through the reinvestment of its earnings.
The Company&rsquo;s overall strategy remains unchanged from 2011. The Company&rsquo;s policy is to not obtain bank loans or any
other financing instrument. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Market risk</I></B>
<FONT STYLE="color: black"><I>&ndash; </I></FONT>The Company&rsquo;s activities expose it primarily to the financial risks of changes
in foreign currency exchange rates and natural gas. The Company use derivative financial instruments to manage these market risks
only in natural gas prices. There has been no change to the Company&rsquo;s exposure to market risks or the manner in which these
risks are managed and measured.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Foreign currency
risk management </I></B><I><FONT STYLE="color: black">&ndash;</FONT><B> </B></I>The Company undertakes certain transactions denominated
in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The carrying amounts of the Company&rsquo;s foreign
currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="8" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><B>Currency: Mexican peso</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 49%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Short &ndash; term assets</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,467,287</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8,235,980</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,755,667</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Short &ndash; term liabilities</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,795,797</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,218,645</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,766,198</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 10.65pt; text-indent: -7.1pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify; text-indent: -3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net monetary asset position in foreign currency</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">8,671,490</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,017,335</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,989,469</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Equivalent in U.S. Dollars (thousands)</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">667,654</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">358,627</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">160,998</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Credit risk
management </I></B><I><FONT STYLE="color: black">&ndash;</FONT><B> </B></I>Credit risk refers to the risk that a counterpart will
default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing
with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial
loss from defaults. The Company only transacts with entities that are rated the equivalent of investment grade and above. The Company
rates its major customers. The Company exposure and the credit ratings of its counterparties are continuously monitored and the
aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty
limits that are reviewed and approved by the risk management committee annually.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Trade receivables consist of
a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on
the financial condition of accounts receivable.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The Company does not have significant
credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Company defines
counterparties as having similar characteristics if they are related entities. Concentration of credit risk to any other counterparty
did not exceed 5% of gross monetary assets at any time during the year.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The credit risk on liquid funds
and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Liquidity and
interest risk tables </I></B>&ndash; Ultimate responsibility for liquidity risk management rests with the board of directors, which
has established an appropriate liquidity risk management framework for the management of the Company&rsquo;s short, medium and
long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities. The following table sets out details of additional undrawn line of credit bank facilities
that the Company has at its disposal to further reduce liquidity risk and obtains bank loans as needed. These lines of credit are
obtained by the Company and one part of them has been used for some of the subsidiaries of Industrias CH, S.A.B. de C.V. (unaudited
balances):</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="8" STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><B>(In thousands of US dollar)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: black"><B>December 31,</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>January 1,</B></P>
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>2 0 1 1</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 49%; padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Bank loans credit line facilities:</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Amount drawn</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">306,000</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">186,000</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">156,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Undrawn balances</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">116,768</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">109,782</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">45,469</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 10.65pt; text-indent: -7.1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">189,232</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">76,218</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">110,531</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>24.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Non-cash transactions</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">During the years ended as of
December 31, 2012 and 2011, all investing activities were paid in the same year and in every financing activities were used cash
flow.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>25.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Segment information</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company segments its information
by region, due to the operational structure and the organization of its business. Information reported to the chief operating decision
maker for the purpose of resource allocation and assessment of segment performance focuses on such regions.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company&rsquo;s sales are
made primarily 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 seven Republic plants. Six are located in the USA (distributed in the states of Ohio,
Indiana and New York) and one in Canada (Ontario). The plant in Canada represents approximately 5% 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 Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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 NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="11" STYLE="padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Year ended December 31, 2012</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>M&eacute;xico</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>USA</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Operations</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>between</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>segments</B></P></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 42%; padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Net sales</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">16,524,598</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">13,019,924</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><U>$</U></FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(20,555)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">29,523,967</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Cost of sales</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">13,049,147</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">12,931,572</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(20,555)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">25,960,164</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Gross profit</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,475,451</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">88,352</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">-</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,563,803</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">850,205</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">378,117</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,228,322</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Other operating income &ndash; Net</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">156,570</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">24,659</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">181,229</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Interest income </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">23,344</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">250</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">23,594</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Interest expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">7,804</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">18,505</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(3,284)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">23,025</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Foreign exchange loss</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(509,149)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(750)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(509,899)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Income (loss) before income taxes</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,288,207</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(284,111)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,284</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,007,380</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Income taxes</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">109,686</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(56,054)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">53,632</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Net income (loss) for the year</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,178,521</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(228,057)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,284</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,953,748</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Other information:</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">750,888</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">261,134</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,012,022</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">25,588,667</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">8,288,629</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(1,420,511)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">32,456,785</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,649,409</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,560,505</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(1,420,511)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">6,789,403</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Acquisitions of property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">937,761</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">366,213</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,303,974</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
</TABLE>

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    <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>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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 NOWRAP STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="11" STYLE="padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Year ended December 31, 2011</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>M&eacute;xico</B></P></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>USA</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Operations</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>between</B></P>
        <P STYLE="font: 9.5pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>segments</B></P></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 42%; padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Net sales</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">15,174,922</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">14,127,627</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(32,051)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">29,270,498</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Cost of sales</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">11,964,761</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">13,630,778</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(32,051)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">25,563,488</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Gross profit</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,210,161</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">496,849</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 8.75pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">-</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,707,010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">718,392</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">331,561</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,049,953</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Other expense &ndash; Net </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(103,670)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(10,036)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(113,706)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Interest income </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">26,089</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">46</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">26,135</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Interest expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">9,502</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">14,223</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">23,725</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Foreign exchange gain </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">581,630</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">581,630</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Income before income taxes </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,986,316</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">141,075</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,127,391</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Income taxes</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">182,027</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(33,197)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">148,830</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Net income for the year</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,804,289</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">174,272</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><U>$</U></FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 8.75pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">-</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,978,561</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 15.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif"><B>Other information:</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">731,678</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">217,838</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">949,516</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">23,353,289</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">9,092,150</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(1,326,388)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">31,119,051</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Total liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,472,301</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">4,841,686</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">(1,326,388)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">6,987,599</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 13.85pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 1.7pt; font-size: 9.5pt; text-indent: -1.7pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Acquisitions of property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">267,720</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">164,280</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">432,000</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-indent: 28.35pt">Information about products (unaudited):</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Trade profiles</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,119,824</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">988,808</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Structural profiles</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,091,040</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,061,210</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Bars</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,507,091</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">1,892,768</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Rebars</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">6,557,581</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">5,350,784</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Pavers</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">715,994</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">614,662</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Hot rolled bar</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">11,526,773</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">12,165,621</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Cold rolled bar</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,678,059</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">3,375,967</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Others</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,327,605</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">2,820,678</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">29,523,967</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">29,270,498</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-indent: 28.35pt">Information about geographical areas (unaudited):</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; margin-bottom: 6pt">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 2</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">15,749,895</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">14,399,682</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">USA</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">12,577,226</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">13,709,807</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Canada</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">795,929</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">766,318</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Latin America</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">366,123</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">356,932</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">Other (Europe and Asia)</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">34,794</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">37,759</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">29,523,967</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Trebuchet MS, Times, Serif">29,270,498</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>26.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Contingencies</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2012, the
Company has the following contingencies:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Pacific Steel, Inc. (PS), a subsidiary located in National City, in
San Diego County, California, United States of America and is dedicated to the purchase and sale of scrap, has the following contingencies
related to environmental issues:</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"><B>California
Regional Water Control Board, CRWCB</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">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,
2012, the California Regional Water Quality Control Board (CRWCB) has not notified to PS with respect to the result of its inspection.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"><B>Department
of Toxic Substances Control, DTSC</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">On September
2002, the Department of Toxic Substances Control (DTSC) inspected 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 $&nbsp;3,288 (USD$&nbsp;0.2 million). This payment was made by PS in 2004
and 2005.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">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, 2012 PS is awaiting a final decision
from DTSC.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">In 2011 PS 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. The shipment of five trucks per day of the land in PS is made in
the presence of personnel of DTSC. At December 31, 2012 PS had already shipped 18,935 tons of material to plant in Mexicali.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">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 USD$&nbsp;0.8 million to USD$ 1.7 million. On such bases, the Company created a provision for this contingency at December
31, 2002, of $ 5,510 (USD$ 0.4 million) which is included in accounts payable en the consolidated statement of financial position.
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>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"><B>Community Development
Commission, CDC</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">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. PS 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 USD$ 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. In 2011, the State of California eliminated all Community Development Committees.
As a result, there is no imminent risk of expropriation.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif">As is the case with most steel manufacturers in the United States
of America, Republic could incur significant costs related to environmental matters in the future, including those arising from
environmental compliance activities and remediation practices resulting from historical waste management facilities in the Republic.
The reserve created at December 31, 2012 and 2011 to cover probable environmental liabilities and compliance activities amounted
to USD$ 3.0 million and USD$&nbsp;3.1 million, respectively. Portions short and long term environmental reserve at December 31,
2012 for USD$ 2.7 million and USD$ 0.3 million, respectively, are included in accounts payable in the short and long term, respectively,
in the accompanying consolidated statement of financial position.</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="color: #1A171B; font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">c.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif">In addition, the Company is not aware of other environmental remediation
liabilities or contingent liabilities related to environmental matters with respect to facilities, for which the establishment
of an additional reserve would not be appropriate at this time. If in the future the Company incurred additional costs of this
type is likely to be made for several years. However, the future regulatory action with respect to the historical practices of
waste management in Republic facilities and future changes in laws and regulations may require us to incur significant costs that
could have a material adverse effect on the future financial performance of the Company.</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">The
Company is involved in a series of lawsuits and legal claims that have arisen during the normal course of its operations. The Company
and its legal advisors do not expect the outcome of these matters to have any significant adverse effect on the Company's financial
position and results of operations, therefore not recognized any liability in this respect.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">The
tax authorities have the right to review, at least the previous five years and could determine differences in taxes payable, plus
any corresponding adjustments, surcharges and fines.</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif"> </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>27.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Commitments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">The
Company 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, 2012 and 2011, rental expenses relating to operating leases
amounted to USD$&nbsp;7.4 million and USD$&nbsp;5.4 million, respectively. At December 31, 2012, total future minimum lease payments
under non-cancelable operating leases are USD$&nbsp;</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1.03<FONT STYLE="color: #1A171B">,
USD$&nbsp;</FONT>0.8, <FONT STYLE="color: #1A171B">USD$0.7, USD$&nbsp;0.6 and USD$&nbsp;.04 million in 2013, 2014, 2015, 2016 and
2017. As of December 31, 2012, the commitments for the iron electric oven de Lorain were USD$ 23.1 million.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #1A171B">On
September 27, 2011, Grupo Simec, S.A.B. de C.V. signed a supply contract with SMS Concast AG. (&quot;Concast&quot;) for the manufacture
of steel mill area team to its subsidiary GV do Brazil Industria e Comercio of Aco LTDA with a capacity of 520,000 tons of annual
steel billet for rebar and wire rod production with 65,000 tons furnace. The amount of the transaction is 15 million Euros a fixed
exchange rate of 1.3764 U.S. dollars per Euro, so that payments will be made in U.S. dollars, the exchange rate agreed by both
parties under the contract and the following program payment</FONT><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #333333">:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">70% on 5 payments
within 15 days after the signing the contract and 10 months.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The remaining 30%
by irrevocable letter of credit in favor of the supplier, which shall be valid for a minimum period of 18 months. This letter shall
be payable in equal installments of 10% of the contract value which will start from the last shipment of equipment to final testing
and startup. This amount will be paid as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5% in the 11.5 months
after signing the contract.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5% within a few weeks
after notification of the supplier to the Company's bill of lading and / or airway and / or certificate in the store that has received
the equipment in good condition, however this partial payment of 5% may be paid in any event no later than February 28, 2013.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The remaining 20%
will be paid by letter of credit irrevocable nontransferable, open until June 30, 2014, which shall be in force until the date
agreed and this 20% will be covered as follows<FONT STYLE="color: #333333">:</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10% will be paid to
the contractor upon delivery of documents of all operating units, but if the cold tests with respect to any equipment operation
cannot be completed and / or successful completion in 12 months from the date of delivery, then do not pay until they are delivered
successfully tested over a period of thirteen months<FONT STYLE="color: #333333">.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10% will be paid to
the contractor upon delivery of documentation and conducting performance tests with respect to any operating unit and if not successfully,
the contractor will be responsible for performing this test to the end of the warranty period<FONT STYLE="color: #333333">.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At December 31, 2012, payments
in advance totaled USD$&nbsp;15.5 million.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Supplier shall provide a guarantee
(Warranty Bond) of 10% for a period of 24 months from the last shipment.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On <FONT STYLE="color: #1A171B">November</FONT>
18, 2011, Grupo Simec, S.A.B. de C.V. entered into a supply contract with SMS Meer S. P. A. (&quot;Meer&quot;), for the manufacture
of a rolling mill, with a production capacity of 400,000 tons of rod <FONT STYLE="color: #1A171B">and</FONT> wire. The cost of
this machinary is 19.6 million Euros, payable in U.S. dollars at the exchange rate of 1.3482 U.S. dollars per Euro. Payment terms
are as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">80% of the contract
value by irrevocable letter of credit in favor of Meer, this letter of credit will be valid for a minimum period of 14 months and
be enforceable against partial shipments made by the supplier.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The remaining 20%
will be payable by a second letter of credit irrevocable and shall be established in the 11.5 month after signing the contract
and valid for a minimum of 14.5 months, and will be payable in two installments:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 78pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10% to carry out
cold tests. Meer will deliver a bank guarantee or insurance in favor of the Company for the same value and will be valid for eight
months from the last shipment greater.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10% of the contract
value to the signing of the Certificate of Final Acceptance. The warranty period of the equipment is 18 months from the date of
the last shipment increased until the issuance of the Provisional Acceptance Certificate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At December 31, 2012, payments
in advance for USD$ 4.4 million<FONT STYLE="color: #333333">.</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On July 20, 2012 it was agreed
that an amendment to the original contract and added that making a case for rolling mill, which will cost 525,000 Euros and will
be payable in U.S. dollars at the exchange rate of 1.23482 U.S. dollars per Euro. Payment terms are as follows:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 20% in advance
and will run a bank guarantee for this amount<FONT STYLE="color: #333333">.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 60% will be paid
at good delivery.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 10% will be paid
to the provisional acceptance of the goods and the delivery of a pro-forma invoice and the certificate of provisional acceptance<FONT STYLE="color: #333333">.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The remaining 10%
will be delivered once accepted the good permanently<FONT STYLE="color: #333333">.</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At December 31, 2012 have made
payments in advance totaled USD$ 0.1 million.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">As mentioned in Note
10, on December 28, 2012 the Company entered into a sale and purchase agreement with Proyectos Comerciales el Ninzi, S.A. de C.V.
(Shareholder of ICH) to sell 261,000 short tons of Coke (short ton equals 907.18474 kilos). Through this contract, the buyer is
obliged to purchase those tons in a period not exceeding two years, without liability if it did not acquire. The sale price will
be USD$&nbsp;450 per short ton, for a total of USD$&nbsp;117.4 million</FONT>.</TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On August 21, 2012
the Company entered into a contract with the supplier Russula, SA for an amount of USD$ 5.4 million for the development of a treatment
plant wastewater for its subsidiary GV do Brasil Industria e Comercio of A&ccedil;o LTDA. This contract shall be payable as follows<FONT STYLE="color: #333333">:</FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10% at 15 days after
signing the contract.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 5% within 15 days
after certification of basic engineering approval, which will be issued by the subsidiary.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10.65% on March 12,
2013.</FONT></TD></TR>                      <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify; padding-right: 13.9pt">&nbsp;</TD></TR>
</TABLE>


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    <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>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7% on April 15, 2013.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 5% within 15 days
after certification of approval to engineering detail, which will be issued by the subsidiary.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 19.35% upon delivery
of the commercial invoice, packing list, certificate of origin of the equipment and insurance and freight for the team's arrival
at the port.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 13% upon delivery
of the equipment at the port of Brazil.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">The 20% against proforma
invoice delivery and acceptance of the provisional certificate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10% upon delivery
of final acceptance certificate of the plant and the warranty.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At December 31, 2012 have made
payments in advance totaled USD$&nbsp;0.8 million<FONT STYLE="color: #333333">.</FONT></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">On August 30, 2012
the Company entered into a contract with the provider Mochetti Gino Industrie Sollevamenti S.r.l. for an amount of USD$&nbsp;4.1
million for the development of two overhead cranes to its subsidiary GV do Brasil Industria e Comercio LTDA of Aco. Payments will
be made as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #333333">30%
within 30 days after signing the contract.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #333333">60%
by credit card which will be issued within 2 months from the date of signing the contract and the letter of credit must have a
minimum validity of 12 months.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif; color: #333333">The
remaining 10% will be paid upon delivery of the proforma invoice and the final acceptance certificate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">At December 31, 2012 have made
advances USD$&nbsp;1.2 million</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>28.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Explanation of the transition to IFRS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The transition date to IFRS is
January 1, 2011. In preparing its first consolidated financial statements under IFRS, transition rules have been applied to the
amounts previously reported in accordance with NIF. As described in Note 2 to the consolidated financial statements, the Company
has applied the mandatory exceptions and has selected certain first-time adoption options in accordance with IFRS 1. The following
reconciliations provide the quantification of the effects of the transition and the impact on stockholders&rsquo; equity as of
the January 1, 2011, transition date and as of December 31, 2011, and on net income and cash flows for the transition year ended
December 31, 2011.</P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify; text-indent: -21.25pt"><B>Consolidated
statement of financial position as of December 31, 2011:</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; margin-bottom: 6pt">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -6.35pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>NIF</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt">
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Effect of transition to</B></P>
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>IFRS</B></P></TD>
    <TD NOWRAP STYLE="padding-right: -5.1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.1pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>IFRS</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 51%; padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Assets</B></FONT></TD>
    <TD STYLE="width: 3%; padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 2%; padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 2%; padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: -5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Current assets:</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cash and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,537,088</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,537,088</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Accounts receivable, net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,709,668</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,709,668</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Inventories, Net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,760,120</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(2,093)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,758,027</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Prepaid expenses</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">193,985</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">193,985</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total current assets</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">16,200,861</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(2,093)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">16,198,768</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Long term inventories, net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,792,040</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,792,040</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">property, plant and equipment, net</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,475,562</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(129,168)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,346,394</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Intangible and other non-current assets, net</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,801,003</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(19,154)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,781,849</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total assets</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31,269,466</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(150,415)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31,119,051</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Liabilities and stockholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Current liabilities:</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Short-term debt</FONT></TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,225</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,225</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Trade accounts payable</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,294,701</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,294,701</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Related parties payable</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">706,385</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">706,385</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><P STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Derivative financial instruments</FONT></P></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">35,456</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">35,456</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Accrued expenses and taxes other than income taxes</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">535,743</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">535,743</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Income tax payable</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">246,247</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">246,247</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total current liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,822,757</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,822,757</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Long term liabilities:</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Employee benefits</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">57,814</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,959</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">67,773</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred income tax</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,071,885</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(23,003)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,048,882</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other liabilities</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">48,187</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">48,187</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total long-term liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,177,886</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(13,044)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,164,842</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,000,643</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(13,044)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,987,599</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Stockholders&rsquo; equity:</B></FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Capital stock</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,142,696</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,310,428)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,832,268</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Additional paid-in capital</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,208,204</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(54,354)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,153,850</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Retained earnings</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12,942,705</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,649,830</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">14,592,535</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cumulative translation effect in foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">824,805</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(411,635)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">413,170</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Fair value of derivative financial instruments</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(25,445)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(915)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(26,360)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total controlling interest</FONT></TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">22,092,965</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(127,502)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">21,965,463</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Non-controlling interest</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,175,858</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(9,869)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,165,989</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total stockholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">24,268,823</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(137,371)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">24,131,452</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31,269,466</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 3pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -3.7pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(150,415)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: -5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: -5.4pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">31,119,051</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify; text-indent: -21.25pt"><B>Consolidated
statement of financial position as of January 1, 2011:</B></P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&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 NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>NIF</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>Effect of transition to</B></P>
        <P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0; text-align: center"><B>IFRS</B></P></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>IFRS</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Assets</B></FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Current assets:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cash and cash equivalents</FONT></TD>
    <TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,384,917</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,384,917</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Accounts receivable, net</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,322,693</FONT></TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,322,693</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Inventories, net</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,218,304</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,627)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">5,216,677</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Prepaid expenses</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">262,708</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">262,708</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total current assets</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12,188,622</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,627)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">12,186,995</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Long term inventories, net</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,605,968</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,605,968</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Property, plant and equipment, net</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,453,237</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(178,617)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">9,274,620</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Intangible and other non-current assets, net</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,101,141</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(21,383)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,079,758</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Trebuchet MS, Times, Serif; font-weight: bold">Total assets</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,348,968</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(201,627)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,147,341</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Liabilities and stockholders&rsquo; equity</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Current liabilities:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Short-term debt</FONT></TD>
    <TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,732</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,732</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Trade accounts payable</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,162,801</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,162,801</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Related parties payable</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">629,676</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">629,676</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Derivative financial instruments</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">79,708</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">79,708</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Accrued expenses and taxes other than income taxes</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">588,469</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">588,469</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Income tax payable</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">434,220</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">434,220</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total current liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,898,606</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,898,606</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Long term liabilities:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Employee benefits</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">45,333</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">17,742</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">63,075</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Deferred income tax</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,735,601</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(61,705)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,673,896</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other liabilities</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">51,003</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">51,003</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total long-term liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,831,937</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(43,963)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,787,974</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total liabilities</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,730,543</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(43,963)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">6,686,580</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Stockholders&rsquo; equity:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Capital stock</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,142,696</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,310,428)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,832,268</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Additional paid-in capital</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,208,204</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(54,354)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">4,153,850</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Retained earnings</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">10,080,278</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,620,442</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">11,700,720</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cumulative translation effect in foreign subsidiaries</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">406,513</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(406,513)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Fair value of derivative financial instruments</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(63,349)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(63,349)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total controlling interest</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">18,774,342</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(150,853)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">18,623,489</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Non-controlling interest</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,844,083</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(6,811)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,837,272</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total stockholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">20,618,425</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(157,664)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">20,460,761</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Total</B></FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,348,968</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(201,627)</FONT></TD>
    <TD NOWRAP STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">27,147,341</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>


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    <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 Times New Roman, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The following table presents
reconciliation between the stockholders&rsquo; equity reported in accordance with NIF to IFRS:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.95pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>December 31,</B></FONT></TD>
    <TD STYLE="padding-right: -4.55pt; padding-left: 3.95pt; font-family: Book Antiqua, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.95pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>January 1,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif"><B>2 0 1 1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total stockholders&rsquo; equity under NIF</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">24,268,823</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">20,618,425</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to inventories</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(2,093)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(1,627)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to property, plant and equipment</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(129,168)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(178,617)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to intangible assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(19,154)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(21,383)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to employee benefits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(9,959)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(17,742)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Effect of deferred income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">23,003</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">61,705</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total stockholders&rsquo; equity under IFRS</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">24,131,452</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">20,460,761</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Consolidated statements of comprehensive
income for the year ended December 31, 2011:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; margin-bottom: 6pt">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -6.35pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>NIF</B></FONT></TD>
    <TD STYLE="padding-right: -5.1pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.1pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Effect of transition to IFRS</B></FONT></TD>
    <TD STYLE="padding-right: -5.1pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -5.1pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>IFRS</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 17.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; border-top: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net sales</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">29,270,498</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">29,270,498</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Cost of sales</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">25,624,612</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(61,124)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">25,563,488</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Administrative expenses</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,054,152</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(4,199)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">1,049,953</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other operating expense, net</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">113,706</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">113,706</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Interest income </FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(26,135)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(26,135)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Interest expense</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">23,725</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">23,725</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Foreign exchange gain</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(581,630)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(581,630)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Income before income taxes</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,062,068</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">65,323</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,127,391</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Income taxes</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">109,837</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">38,993</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">148,830</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net income for the year</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,952,231</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">26,330</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,978,561</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 14.2pt; text-indent: -14.2pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Other comprehensive (loss) income:</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Translation effects of foreign subsidiaries</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">664,150</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(9,009)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">655,141</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Fair value of derivative financial instruments, net of taxes</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">34,017</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,972</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">36,989</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total other comprehensive income (loss) for the year</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">698,167</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(6,037)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">692,130</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total comprehensive income for the year</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,650,398</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">20,293</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,670,691</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net income (loss) attributable to:</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Controlling interest </FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,862,427</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">29,388</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,891,815</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Non-controlling interest</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">89,804</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(3,058)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">86,746</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Net income for the year</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,952,231</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">26,330</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,978,561</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Comprehensive income (loss) attributable to:</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Controlling interest</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,318,623</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">23,351</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,341,974</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 3pt; padding-left: 0.15in; text-indent: -7.1pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Non-controlling interest</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">331,775</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(3,058)</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">328,717</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 3.55pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Comprehensive income for the year</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,650,398</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: center; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">20,293</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-bottom: windowtext 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,670,691</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Following is presented reconciliation
between the comprehensive income for the year ended December 31, 2011, reported in accordance with NIF to IFRS:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 0 0 14.2pt">&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="padding-right: 13.85pt; padding-left: 3.95pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Trebuchet MS, Times, Serif">2 0 1 1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 14%; padding-right: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total comprehensive income under NIF</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,650,398</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to inventories</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(466)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to property, plant and equipment</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">49,449</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to intangible assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">2,229</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Adjustment to employee benefits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">7,783</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.15pt; text-align: justify"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Effect of deferred income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">(38,702)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: justify; text-indent: -3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">Total comprehensive income under IFRS</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">$</FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">3,670,691</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 28.35pt; text-align: justify">On the year ended December 31,
2011, adjustments for the conversion from MFRS to IFRS did not generate changes in the areas of cash flows generated by operating,
investing and financing activities included in the consolidated statement of cash flows originally reported under MFRS.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 28.35pt; text-align: justify">The transition to IFRS resulted
in the following adjustments:</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Effects of
inflation</I></B> &ndash; In accordance with IAS 29, <I>Financial Reporting in Hyperinflationary Economies</I>, inflationary effects
must be recognized only in hyperinflationary economies, which are identified by several characteristics of a country&rsquo;s economic
environment. The most objective parameter to classify an economy as hyperinflationary is when the accumulated inflation of three
years is equal to or greater than 100%. Given that the Company and its main subsidiaries operate in a non-hyperinflationary economic
environment since 1998, the effects of inflation recognized until 2007 under MFRS were cancelled for non-hyperinflationary periods,
except for property, plant and equipment, for which the exception established in IFRS 1 to use restated values as deemed cost was
applied, as discussed in Note 2.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Severance payments
</I></B>&ndash; Per NIF D-3, <I>Employee Benefits</I>, the Company records a provision and the related expense with respect to
severance payments for employee terminations before their retirement date or for as a result of an offer made to its employees
to promote a voluntary termination. MFRS does not require the existence of a formal plan. IAS 19, <I>Employee Benefits</I>, requires
the establishment of a formal plan, for which reason the related liability has been removed from the consolidated financial statements.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Deferred income
taxes </I></B>&ndash; The Company readjusted its deferred taxes in accordance with IAS 12, <I>Income Taxes</I>, using the carrying
value of assets and liabilities recognized under IFRS.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B><I>Components
and spare parts and rollers</I></B> &ndash; In accordance with IAS 16, <I>Property, Plant and Equipment</I>, the Company determined
the significant components of property, plant and equipment; consequently, it readjusted their useful lives and the respective
effect in accumulated depreciation as of the transition date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&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: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>29.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Trebuchet MS, Times, Serif"><B>Financial statements issuance authorization</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">On April 2, 2013, the issuance
of the accompanying consolidated financial statements was authorized by Ing. Luis Garc&iacute;a Lim&oacute;n and C.P. Mario Moreno
Cortez, Chief Executive Officer and Coordinator of Finance, respectively, which must be approved by the Company&rsquo;s Board of
Directors, Audit Committee and Stockholders.</P>

<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt"></P>

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<P STYLE="font: 10pt Trebuchet MS, Times, Serif; margin: 0 13.85pt 0 14.2pt">&nbsp;</P>



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<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>2
<FILENAME>e53688ex8-1.htm
<DESCRIPTION>LIST OF SUBSIDIARIES
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 6pt; margin-left: 60%; text-indent: 0%; text-align: right"><B>Exhibit
8.1</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 66%; 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: 17%; 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: 17%; 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 STYLE="font: 10pt Times New Roman, Times, Serif">Simec International, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Undershaft Investments, N.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Cura&ccedil;ao</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pacific Steel, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">SimRep Corporation and subsidiaries (Republic)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">50.22%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Coordinadora de Servicios Sider&uacute;rgicos de Calidad, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Comercializadora Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Industrias del Acero y del Alambre, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Procesadora Mexicali, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Servicios Simec, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Sistemas de Transporte de Baja California, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Operadora de Metales, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Operadora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Operadora de Servicios de la Industria Sider&uacute;rgica ICH, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Arrendadora Simec S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Compa&ntilde;&iacute;a Sider&uacute;rgica de Guadalajara S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">CSG Comercial, S.A. de C.V</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.95%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Comercializadora de Productos de Acero de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.95%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Sider&uacute;rgica de Baja California, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.95%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Corporaci&oacute;n Aceros DM, S.A. de C.V. and subsidiaries</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Comercializadora MSAN, S.A de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 2, Inc. (merged into Simec Steel on Oct 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 3, Inc. (merged into Simec Steel on Oct 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 4, Inc. (merged into Simec Steel on Oct 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 5, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Corporaci&oacute;n ASL, S.A. de C.V. </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 6, S. A. de C. V. </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 2pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;Acero Transportes San, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 7, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec Acero, S. A. de C. V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec USA, Corp.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pacific Steel Projects, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec Steel, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Corporativos G&amp;DL, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">GV do Brasil Industria e Comercio de A&ccedil;o LTDA.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Orge, S.A.de C.V. (since Oct 2012)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.99%</FONT></TD></TR>
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<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>3
<FILENAME>e53688ex12-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>Exhibit 12.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: center"><B>Annual Certifications</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; 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 6pt; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Mario Moreno
Cortez, certify that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt; text-indent: 0.5in">&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 6pt">Dated: May 15, 2013</P>

<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"><FONT STYLE="font-size: 10pt">By:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">/s/ Mario Moreno Cortez</FONT></TD></TR>
<TR>
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: center"><HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: #A0A0A0"><FONT STYLE="font-size: 10pt"> </FONT></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"><FONT STYLE="font-size: 10pt">Mario Moreno Cortez</FONT></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"><FONT STYLE="font-size: 10pt"><I>Coordinator of Finance</I></FONT></TD></TR>
</TABLE>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.2
<SEQUENCE>4
<FILENAME>e53688ex12-2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

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

<P STYLE="font: 12pt 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; text-align: right"><B>Exhibit 12.2</B></P>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: May 15, 2013</P>


<HR SIZE="5" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: #A0A0A0">

<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%">
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 4%"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">/s/ Luis Garcia Lim&oacute;n</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: #A0A0A0"><FONT STYLE="font-size: 10pt"> </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Luis Garcia Lim&oacute;n</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><I>Chief Executive Officer</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>


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    <!-- Field: /Page -->

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>5
<FILENAME>e53688ex13-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>
<P STYLE="font: 12pt 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; text-align: right"><B>Exhibit 13.1</B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Report
on Form 20-F for the year ended December 31, 2012 of the Company, as filed with the Securities and Exchange Commission on May 15,
2013, 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: May 15, 2013</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">/s/ Luis Garcia Lim&oacute;n</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: #A0A0A0"><FONT STYLE="font-size: 10pt"> </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Luis Garcia Lim&oacute;n</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><I>Chief Executive Officer</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">/s/ Mario Moreno Cortez</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: #A0A0A0"><FONT STYLE="font-size: 10pt"> </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Mario Moreno Cortez</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><I>Coordinator of Finance</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>



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

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

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
