<SEC-DOCUMENT>0000891092-16-017506.txt : 20160921
<SEC-HEADER>0000891092-16-017506.hdr.sgml : 20160921
<ACCEPTANCE-DATETIME>20160921163753
ACCESSION NUMBER:		0000891092-16-017506
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20151231
FILED AS OF DATE:		20160921
DATE AS OF CHANGE:		20160921

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:		161895988

	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>e71215_20f.htm
<DESCRIPTION>FORM 20-F
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

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

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_Toc322026513"></A><A NAME="a_Toc322026071"></A><A NAME="a_Toc322025880"></A>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" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 22pt; text-align: left">&#9744;</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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 22pt; text-align: left">&#9746;</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, 2015</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 22pt; text-align: left">&#9744;</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" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 22pt; text-align: left">&#9744;</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"><A NAME="a_Toc322026514"></A><A NAME="a_Toc322025881"></A>Commission
File Number 1-11176</P>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center"><BR>
<B>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"><A NAME="a_Toc322026515"></A><A NAME="a_Toc322026073"></A><A NAME="a_Toc322025882"></A><B>Securities
registered or to be registered pursuant to Section 12(b) of the Act: </B></P>


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<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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <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>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>
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 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">*</TD><TD>Not for trading, but only in connection with the registration of American depositary shares.</TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B>Indicate the number of outstanding
shares of each of the issuer&rsquo;s classes of common stock as of December 31, 2015 was:</B></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_Toc322026516"></A><A NAME="a_Toc322026074"></A><A NAME="a_Toc322025883"></A>Series
B Common Stock &mdash; 486,242,769 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;&#9744; No&nbsp;<A NAME="Check14"></A>&#9746;</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;&#9744; No&nbsp;&#9746;</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;&#9746; No&nbsp;<A NAME="Check10"></A>&#9744;</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;<A NAME="Check11"></A>&#9744; No&nbsp;<A NAME="Check12"></A>&#9744; (note:
not required of registrant)</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Large accelerated filer&nbsp;&#9744; Accelerated filer&nbsp;&#9746;
Non-accelerated filer&nbsp;<A NAME="Check13"></A>&#9744;</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">&#9744;&nbsp;U.S. GAAP &#9746;&nbsp;International Financial Reporting
Standards as issued by the International Accounting Standards Board&nbsp;&#9744;&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;&#9744; Item 18&nbsp;&#9744;</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;&#9744; No&nbsp;&#9746;</P>



<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"><A NAME="TOCHeading"></A>Table
of Contents</P>

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



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 90%; text-align: left; padding-top: 6pt; padding-bottom: 6pt; padding-left: 0in"><A HREF="#a_Toc462142412">PART I</A></TD>
    <TD STYLE="width: 10%; text-align: right; padding-top: 6pt; padding-bottom: 6pt"><A HREF="#a_Toc462142412">1</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142413">Item 1.&nbsp;&nbsp;&nbsp;Identity of Directors, Senior Management and Advisers</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142413">1</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142414">Item 2.&nbsp;&nbsp;&nbsp;Offer Statistics and Expected Timetable</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142414">1</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142415">Item 3.&nbsp;&nbsp;&nbsp;Key Information</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142415">1</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142416">Item 4.&nbsp;&nbsp;&nbsp;Information on the Company</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142416">24</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142417">Item 4A.&nbsp;&nbsp;&nbsp;Unresolved Staff Comments</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142417">54</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142418">Item 5.&nbsp;&nbsp;&nbsp;Operating and Financial Review and Prospects</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142418">54</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142419">Item 6.&nbsp;&nbsp;&nbsp;Directors, Senior Management and Employees</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142419">79</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142420">Item 7.&nbsp;&nbsp;&nbsp;Major Shareholders and Related Party Transactions</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142420">87</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142421">Item 8.&nbsp;&nbsp;&nbsp;Financial Information</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142421">89</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142422">Item 9.&nbsp;&nbsp;&nbsp;The Offer and Listing</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142422">91</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142423">Item 10.&nbsp;&nbsp;&nbsp;Additional Information</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142423">93</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142424">Item 11.&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures About Market Risk</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142424">107</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142425">Item 12.&nbsp;&nbsp;&nbsp;Description of Securities Other than Equity Securities</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142425">108</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 6pt; padding-left: 0in"><A HREF="#a_Toc462142426">PART II</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 6pt"><A HREF="#a_Toc462142426">109</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142427">Item 13.&nbsp;&nbsp;&nbsp;Defaults, Dividends Arrearages and Delinquencies</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142427">109</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142428">Item 14.&nbsp;&nbsp;&nbsp;Material Modifications to the Rights of Security Holders and Use of Proceeds</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142428">110</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142429">Item 15.&nbsp;&nbsp;&nbsp;Controls and Procedures</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142429">110</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142430">Item 16.&nbsp;&nbsp;&nbsp;Reserved</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142430">119</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142431">Item 16A.&nbsp;&nbsp;&nbsp;Audit Committee Financial Expert</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142431">119</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142432">Item 16B.&nbsp;&nbsp;&nbsp;Code of Ethics</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142432">119</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142433">Item 16C.&nbsp;&nbsp;&nbsp;Principal Accountant Fees and Services</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142433">119</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142434">Item 16D.&nbsp;&nbsp;&nbsp;Exemptions from the Listing Standards for Audit Committees</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142434">120</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142435">Item 16E.&nbsp;&nbsp;&nbsp;Purchases of Equity Securities by the Issuer and Affiliated Purchasers</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142435">120</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142436">Item 16F.&nbsp;&nbsp;&nbsp;Change in Registrant&#146;s Certifying Accountant</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142436">120</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142437">Item 16G.&nbsp;&nbsp;&nbsp;Corporate Governance</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142437">120</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 6pt; padding-left: 0in"><A HREF="#a_Toc462142438">PART III</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 6pt"><A HREF="#a_Toc462142438">121</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142439">Item 17.&nbsp;&nbsp;&nbsp;Financial Statements</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142439">121</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142440">Item 18.&nbsp;&nbsp;&nbsp;Financial Statements</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142440">121</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 6pt; padding-bottom: 0pt; padding-left: 0in"><A HREF="#a_Toc462142441">Item 19.&nbsp;&nbsp;&nbsp;Exhibits</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#a_Toc462142441">122</A></TD></TR>
</TABLE>

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


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><A NAME="a_Toc322026517"></A><A NAME="a_Toc322026075"></A><A NAME="a_Toc322025884"></A>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 the United Mexican States (&ldquo;Mexico&rdquo;).
Unless the context requires otherwise, when used in this annual report, the terms &ldquo;we,&rdquo; &ldquo;our,&rdquo; &ldquo;the
company,&rdquo; &ldquo;our company&rdquo; and &ldquo;us&rdquo; refer to Grupo Simec, S.A.B. de C.V., together with its consolidated
subsidiaries.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">This annual report contains translations
of certain peso amounts to U.S. dollars at specified rates solely for your convenience. These translations do not mean that the
peso amounts actually represent such dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise
indicated, we have translated these U.S. dollar amounts from pesos at the exchange rate of Ps. 17.3398 per U.S.$1.00, the interbank
transactions rate in effect on December 31, 2015. On September 15, 2016, the interbank transactions rate for the peso was Ps. 19.1520
per U.S.$1.00.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><A NAME="a_Toc322026518"></A><A NAME="a_Toc322026076"></A><A NAME="a_Toc322025885"></A>FORWARD
LOOKING STATEMENTS</P>

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

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

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

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

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

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

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

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


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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>the factors discussed in Item 3.D &ndash; &ldquo;Risk Factors&rdquo; below.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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"><B><A NAME="a_Toc323243092"></A><A NAME="a_Toc323243114"></A><A NAME="a_Toc323243155"></A><A NAME="a_Toc323243184"></A><A NAME="a_Toc323243360"></A><A NAME="a_Toc323243378"></A><A NAME="a_Toc323246753"></A><A NAME="a_Toc323247031"></A><A NAME="a_Toc323253255"></A><A NAME="a_Toc323253332"></A><A NAME="a_Toc323253655"></A><A NAME="a_Toc323254046"></A><A NAME="a_Toc323310642"></A><A NAME="a_Toc323310708"></A><A NAME="a_Toc323310752"></A><A NAME="a_Toc323315304"></A><A NAME="a_Toc462142412"></A>PART
I</B></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc462142413"></A><A NAME="a_Toc323315305"></A><A NAME="a_Toc323310709"></A><A NAME="a_Toc323254047"></A><A NAME="a_Toc323253656"></A><A NAME="a_Toc323253333"></A><A NAME="a_Toc323247032"></A><A NAME="a_Toc323246754"></A><A NAME="a_Toc323243361"></A><A NAME="a_Toc323243156"></A><A NAME="a_Toc323243115"></A><A NAME="a_Toc323243093"></A><A NAME="a_Toc322026520"></A><A NAME="p1"></A><FONT STYLE="color: #010000">Item&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000">1.<FONT STYLE="font: 8pt 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>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc462142414"></A><A NAME="a_Toc323315306"></A><A NAME="a_Toc323310710"></A><A NAME="a_Toc323254048"></A><A NAME="a_Toc323253657"></A><A NAME="a_Toc323253334"></A><A NAME="a_Toc323247033"></A><A NAME="a_Toc323246755"></A><A NAME="a_Toc323243362"></A><A NAME="a_Toc323243157"></A><A NAME="a_Toc323243116"></A><A NAME="a_Toc323243094"></A><A NAME="a_Toc322026521"></A><A NAME="p1a"></A><FONT STYLE="color: #010000">Item&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000">2.<FONT STYLE="font: 8pt 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>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc462142415"></A><A NAME="a_Toc323315307"></A><A NAME="a_Toc323310711"></A><A NAME="a_Toc323254049"></A><A NAME="a_Toc323253658"></A><A NAME="a_Toc323253335"></A><A NAME="a_Toc323247034"></A><A NAME="a_Toc323246756"></A><A NAME="a_Toc323243363"></A><A NAME="a_Toc323243158"></A><A NAME="a_Toc323243117"></A><A NAME="a_Toc323243095"></A><A NAME="a_Toc322026522"></A><A NAME="p1b"></A><FONT STYLE="color: #010000">Item&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000">3.<FONT STYLE="font: 8pt 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"><A NAME="a_Toc323243159"></A><A NAME="a_Toc323243118"></A><A NAME="a_Toc322026523"></A><A NAME="a_Toc322026081"></A><A NAME="a_Toc322025890"></A><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, 2014 and 2015 and for each of the three years ended December 31, 2013, 2014 and 2015. Beginning
January 1, 2011, we adopted International Financial Reporting Standards (IFRS), and its amendments and interpretations, 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 4 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">When preparing the financial statements for
our individual subsidiaries, transactions in currencies other than our functional currency are recognized as foreign currency at
the exchange rates of the date in which such operations take place. At the end of each reporting period, monetary items in foreign
currencies are reconverted at the actual period end exchange rate.</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 exchange rate differences are recognized
in our income statement, except for:</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: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Differences in exchange rates from loans denominated in foreign currency for assets under construction for productive future
use, which are included in the cost of those assets when considered as an adjustment to interest costs on such loans, provided
that such differences do not arise from loans between related parties which effect is eliminated in the consolidation process;</TD></TR></TABLE>

<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: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Differences in exchange rates resulting from exchange rate hedging transactions; and</TD></TR></TABLE>

<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: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Differences in exchange rates resulting from accounts receivable or accounts payable from/to a foreign company for which payment
is not planned nor possible (thus forming part of the net investment in such foreign transaction), which are initially recognized
in other comprehensive income and reclassified from equity to profit or loss when the net investment is partially or totally sold.</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; text-indent: 35.45pt">The translation effect in the results of operations
for the years ended December 31, 2015, 2014 and 2013 resulted from applying the following exchange rates (peso/dollar) to the active
or passive monetary position in foreign currency:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; background-color: white; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><B>Year ended</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><B>Exchange Rate (pesos)</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><B>Change</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2015</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center; text-indent: 1.2pt">17.3398</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center">2.6050</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2014</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center; text-indent: 1.2pt">14.7348</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center">1.6696</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center; text-indent: 1.2pt">13.0652</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: center">0.0772</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; text-indent: 35.45pt"><B><I>Transitions to IFRS &ndash; </I></B>Our
annual consolidated financial statements for the fiscal year ended 2011 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">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 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&rsquo;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> &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.</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" 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: 14.05pt"><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 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 as of and for each of the periods indicated. The selected financial and operating information
set forth below as of December 31, 2014 and 2015 and for each of the three years ended December 31, 2013, 2014 and 2015 has been
derived in part from our consolidated financial statements included elsewhere in this annual report, which have been reported on
by Castillo Miranda y Compa&ntilde;&iacute;a, S.C., a member practice of BDO International Limited (&ldquo;BDO&rdquo;), and BDO
have relied on the audited consolidated financial statements of Corporaci&oacute;n Aceros DM., S.A. de C.V. (&ldquo;Aceros DM&rdquo;)
subsidiaries and affiliates, reported on by Marcelo de los Santos y C&iacute;a., S. C. a practice member of Moore Stephens International
(&ldquo;Moore Stephens&rdquo;). 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>


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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: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt 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="font-size: 8pt; text-align: center">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011 <SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2012 <SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2013 <SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2014 <SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2015 <SUP>(2)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2015 <SUP>(2)</SUP></B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="9" STYLE="font-size: 8pt; text-align: center; vertical-align: top">(Millions of pesos, except per share and ADS data and operational data)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: center">(Millions of U.S. dollars)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income Statement</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-indent: -0.1in; padding-left: 0.1in">Data:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; font-style: italic; text-align: left">IFRS:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales&#9;</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; font-size: 8pt; text-align: right">29,270</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; font-size: 8pt; text-align: right">29,524</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; font-size: 8pt; text-align: right">24,369</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; font-size: 8pt; text-align: right">26,829</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; font-size: 8pt; text-align: right">24,476</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; font-size: 8pt; text-align: right">1,412</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Cost of sales&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">25,563</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">25,960</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">22,410</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">25,492</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">23,097</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,332</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Impairment of property, plant and equipment</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">-</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">-</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">-</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">-</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,072</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">120</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit (loss)&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,707</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,564</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,959</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,337</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(693)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(40)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Administrative expenses&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">595</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">753</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">732</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">801</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,163</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">67</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and amortization&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">455</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">475</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">385</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">393</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">419</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">24</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other (expense) income, net&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(113)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">181</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(59)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">61</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">173</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">10</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest income&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">26</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">23</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">20</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">25</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">34</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest expense&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">24</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">23</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">28</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">23</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">40</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Foreign exchange gain (loss)&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">582</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(509)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(67)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">474</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(382)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(22)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before taxes&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,128</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,008</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">708</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">680</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(2,490)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(144)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income tax expense&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">149</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">54</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(281)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">162</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">771</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">44</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,979</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,954</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">989</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">518</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(3,261)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(188)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Non-controlling interest income (loss)&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">87</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(116)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(527)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(686)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(2,047)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(118)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Controlling interest income (loss)&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,892</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,070</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,516</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,204</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(1,214)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(70)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Net income (loss) per share&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">5.81</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">4.16</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3.06</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2.44</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(2.47)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(0.14)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss) per ADS<SUP>(3)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">17.43</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">12.48</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">9.18</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">7.33</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(7.40)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(0.43)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Weighted average shares outstanding (thousands)<SUP>(3)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">497,709</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">497,709</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">495,732</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">492,781</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">492,421</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">492,421</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Weighted average ADSs outstanding (thousands)<SUP>(3)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">165,903</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">165,903</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">165,244</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">164,260</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">164,140</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">164,140</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Balance Sheet Data:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-style: italic; text-indent: -0.1in; padding-left: 0.1in">IFRS:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total assets&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">31,119</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">32,456</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">33,280</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">35,896</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">32,244</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,859</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total short-term liabilities&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,823</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,737</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">4,705</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">5,821</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">5,588</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">322</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Total long-term liabilities<SUP>(4)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,165</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,052</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,300</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,295</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,535</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">89</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total stockholders&rsquo; equity&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">24,131</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">25,667</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">26,275</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">27,780</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">25,121</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,448</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flow Data:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-style: italic; text-indent: -0.1in; padding-left: 0.1in">IFRS:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash provided by operating activities&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,954</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,655</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,051</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,370</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(382)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(22)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash provided by (used in) financing activities&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">-</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(23)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(259)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(48)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(285)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(16)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash (used in) provided by investing activities &#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(440)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(1,507)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(2,948)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(2,060)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(655)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">(38)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other Data:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-style: italic; text-indent: -0.1in; padding-left: 0.1in">IFRS:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Capital expenditures&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">432</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,304</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,178</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,858</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">648</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">37</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Adjusted EBITDA<SUP>(5)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,607</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,348</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,895</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,261</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,058</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">61</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Working capital<SUP>(6)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">12,376</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">13,583</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,497</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,852</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,392</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">657</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and Amortization&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">950</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,012</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,053</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,118</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,261</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">73</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Dividends declared&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">0</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">0</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">0</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">0</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">0</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">0</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operational Data:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; padding-left: 5.75pt">(capacity and production in thousands of tons):</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Annual installed capacity<SUP>(7)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,758</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,791</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,818</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">3,830</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">4,330</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Mexico&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,275</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,357</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,288</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,419</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,452</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">United States, Canada and elsewhere outside Mexico&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,014</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">905</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">776</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">778</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">574</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total tons shipped&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,289</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,262</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,064</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,197</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">2,026</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">SBQ steel&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,178</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,111</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">989</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,131</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">929</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Structural and other steel products&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,111</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,151</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,075</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,066</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,097</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Number of employees&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">4,686</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">5,086</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">5,117</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">4,861</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">4,420</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">N/A</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-indent: -0.1in; padding-left: 0.1in">Per ton data</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-style: italic; text-indent: -0.1in; padding-left: 0.1in">IFRS:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Net sales per ton<SUP>(8)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">12,787</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">13,052</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,807</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">12,212</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">12,081</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">697</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Cost of sales per ton<SUP>(8)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,168</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,477</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">10,858</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,603</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">11,400</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">657</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-indent: -0.1in; padding-left: 0.1in">Adjusted EBITDA<SUP>(5) </SUP>per ton<SUP>(8)</SUP>&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,576</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">1,480</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">918</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">574</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">522</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: right">30</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, 2012, 2013, 2014 and 2015.</TD></TR></TABLE>

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<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. 17.3398
per U.S.$1.00, the interbank transactions rate in effect on December 31, 2015.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Our series B shares are listed on the Mexican Stock Exchange, and the ADSs are listed on the New York Stock Exchange. One American
depositary share, or &ldquo;ADS,&rdquo; represents three series B shares.</TD></TR></TABLE>

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<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>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(5)</TD><TD>Adjusted EBITDA is not a financial measure computed under 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); (iii) other income (expense); and (iv) income
tax expense and employee statutory profit-sharing expense.</TD></TR></TABLE>


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<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 and foreign currency exchange
rates, which can have little bearing on our operating performance; (iii) other income (expense) that are non-recurring operations;
and (iv) income tax expense and employee statutory profit-sharing expense. However, Adjusted EBITDA has certain significant limitations,
including that it does not include the following:</P>

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

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

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

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: center">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Year Ended December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2011<SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2012<SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2013<SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2014<SUP>(1)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2015<SUP>(2)</SUP></B></P></TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2015<SUP>(2)</SUP></B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font: 8pt Times New Roman, Times, Serif; text-align: center">(millions of pesos)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: center">(millions of U.S. dollars)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-style: italic; text-indent: -0.1in; padding-left: 0.1in">IFRS:</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)&#9;</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">2,979</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">1,954</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">989</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">518</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">(3,261</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">)</TD><TD STYLE="width: 2%; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">(188</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Impairment of property, plant and equipment</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">2,072</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">120</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Depreciation and amortization&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">950</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,012</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,053</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,118</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,261</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">73</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other (expense) income&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">(113</TD><TD STYLE="font-size: 8pt; text-align: left">)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">181</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">(59</TD><TD STYLE="font-size: 8pt; text-align: left">)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">61</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">173</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">10</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest income&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">26</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">23</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">20</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">25</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">34</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">2</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest Expense&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">24</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">23</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">28</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">23</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">40</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">2</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Foreign exchange gain (loss)&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">582</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">(509</TD><TD STYLE="font-size: 8pt; text-align: left">)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">(67</TD><TD STYLE="font-size: 8pt; text-align: left">)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">474</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">(382</TD><TD STYLE="font-size: 8pt; text-align: left">)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">(22</TD><TD STYLE="font-size: 8pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Income tax expense&#9;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right">149</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right">54</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(281</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right">162</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right">771</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right">44</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Adjusted EBITDA&#9;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">3,607</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">3,348</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,895</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,261</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">1,058</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">61</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 17.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; 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: 17.85pt">(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: 17.85pt">(7)</TD><TD>Installed capacity is determined at December 31 of the relevant year.</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: 17.85pt">(8)</TD><TD>Data in pesos and U.S. dollars, respectively, not in millions.</TD></TR></TABLE>


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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48%; padding-right: 5.4pt; font-size: 10pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Year Ended December 31 </B></FONT></TD>
    <TD STYLE="width: 13%; 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: 13%; 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: 13%; 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>Average<SUP>(1)</SUP></B></P></TD>
    <TD STYLE="width: 13%; 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>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">2011&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><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"><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"><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"><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"><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"><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"><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"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.96</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">2013&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.43</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.98</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.76</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.10</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">2014&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.79</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.85</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.30</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.75</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">2015&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.36</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.56</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.87</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.20</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: 8pt Times New Roman, Times, Serif; border-collapse: collapse; margin-bottom: 12pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48%; padding-right: 5.4pt; font-size: 10pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Month in 2016</B></FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; 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>High</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; 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>Low</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; 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>Average<SUP>(1)</SUP></B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; 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>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">January&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.59</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.36</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.06</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.21</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">19.19</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.02</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.43</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.07</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.94</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.21</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.63</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.21</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.91</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.19</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.48</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.19</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">May&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.55</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.24</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.14</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.41</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">June&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">19.15</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.13</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.65</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.49</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">July&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.91</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.29</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.62</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.76</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">August&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.92</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.98</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.47</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.85</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">September (through September 16)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">19.66</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.34</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.91</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">19.66</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>

<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"><A NAME="a_Toc322026524"></A><A NAME="a_Toc322026082"></A><A NAME="a_Toc322025891"></A><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"><A NAME="a_Toc322026525"></A><A NAME="a_Toc322026083"></A><A NAME="a_Toc322025892"></A><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"><A NAME="a_Toc322026526"></A><A NAME="a_Toc322026084"></A><A NAME="a_Toc322025893"></A><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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026527"></A><A NAME="a_Toc322026085"></A><A NAME="a_Toc322025894"></A>Risks
Related to Our Business</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026528"></A><A NAME="a_Toc322026086"></A><A NAME="a_Toc322025895"></A>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 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. Global steel prices decreased in 2013, 2014 and 2015. 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 may do so in the future. 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 in 2011 increased approximately
21%, in 2012 increased approximately 1%, in 2013 decreased approximately 6%, in 2014 increased approximately 7% and in 2015 decreased
approximately 16%; prices of ferroalloys in 2011 increased approximately 10%, in 2012 and 2013 decreased approximately 10% and
5%, respectively, in 2014 increased approximately 16% and in 2015 decreased approximately 9%. We may not be able to pass along
these and other cost increases in the future and, therefore, our profitability may be materially and adversely affected. Even when
we can successfully increase our prices, interim reductions in profit margins frequently occur due to a time lag between the increase
in raw material prices and the market acceptance of higher selling prices for finished steel products. We cannot assure you that
our customers will agree to pay increased prices for our steel products that compensate us for increases in our raw material costs.</P>

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

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">The inability to use our existing inventory in
the future or impairments in the valuation of our inventory could adversely affect our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have 231,942 metric tons of coke,
which is one of the principal raw materials used in our blast furnaces. We have not used this raw material in the last six years
because our Lorain, Ohio blast furnace facility has been idle during such period. We intend to start using coke as a substitute
for coal in our productive process in our</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">other plants in Mexico and the United States, however we
cannot assure you that we will be able to effectively utilize such inventory.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have assigned a fair market value
of Ps. 966.7 million to our coke inventory, however prices for coke have fluctuated significantly in the past and could continue
to do so in the future and significant fluctuations in coke prices could adversely affect our existing inventory value.</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 11% in 2011, 3% in 2012, 9% in 2013 and 7% in
2014, and decreased approximately 12% in 2015; and prices for natural gas decreased approximately 14% in 2011 and 32% in 2012,
increased approximately 16% in 2013 and 25% in 2014, and decreased approximately 23% in 2015. Moreover, energy costs constitute
a significant and increasing component of our costs of operations. Our energy cost was 13% of our manufacturing conversion cost
for 2015 compared to 14% for 2014, 13% for 2013, 11% for 2012 and 12% for 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We pay special rates to the Mexican federal
electricity commission (<I>Comisi&oacute;n Federal de Electricidad</I> or &ldquo;CFE&rdquo;) for electricity. We also pay special
rates to Pemex, Gas y Petroqu&iacute;mica B&aacute;sica, (&ldquo;PEMEX&rdquo;), the national oil company, for natural gas used
at our facilities in Mexico. We cannot assure you that these special rates will continue to be available to us or that these rates
may not increase significantly in the future, particularly in light of recent energy reforms in Mexico. 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, 2015, we have not entered into derivative financial instruments
in Mexico and the United States. 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
intense. Competition in the steel industry exerts a downward pressure on prices, and, due to high start-up costs, the economics
of operating a steel mill on a continuous basis may encourage mill operators to establish and maintain high levels of output even
in times of low demand, which further decreases prices and profit margins. The recent trend of consolidation in the global steel
industry may further increase competitive pressures on independent producers of our size, particularly if large steel producers
formed through consolidations, which have access to greater resources than us, adopt predatory pricing strategies that decrease
prices and profit margins. If we are unable to remain competitive with these producers, our profitability and market share would
likely be materially and adversely affected.</P>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026529"></A><A NAME="a_Toc322026087"></A><A NAME="a_Toc322025896"></A>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, therefore 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 additional 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">&#183;</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">&#183;</FONT></TD><TD>diversion of our resources and of management&rsquo;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">&#183;</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">&#183;</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">&#183;</FONT></TD><TD>increased likelihood of involvement in labor, commercial or regulatory disputes or litigation related to the new enterprise;</TD></TR></TABLE>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We intend to continue to pursue a growth
strategy, the success of which will depend in part on our ability to acquire and integrate additional facilities. Some of these
acquisitions may be outside of Mexico, the United States and Canada. Acquisitions involve a number of special risks, in addition
to those described above, that could</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 five 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, 2011, 2012, 2013, 2014 and 2015, we and our auditors
identified material weaknesses (as defined under standards established by the Public Company Accounting Oversight Board, (United
States of America)) in our internal controls over financial reporting (our management did not assess the effectiveness of our internal
controls over financial reporting as of December 31, 2015). 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, 2011</I>.
On January 12, 2012, our audit and corporate practices committee (&ldquo;Audit Committee&rdquo;) received a formal complaint from
the General Accounting and Treasury Services Manager of Republic Engineered Products, Inc. (&ldquo;Republic&rdquo;), stating that
he had identified, during his review of the financial statements of SimRep and its subsidiaries for the year ended December 31,
2011, what he considered to be material accounting errors, and potential &ldquo;management override of internal controls&rdquo;
at SimRep. In response, our Audit Committee instructed our internal audit department to perform a review, and subsequently engaged
outside counsel to conduct an internal investigation concerning the accounting matters and potential management overrides of internal
controls at SimRep. As a result of our investigation, we have identified material weakness at SimRep, finding that, with respect
to SimRep and its subsidiaries, management did not design and maintain effective controls relating to the year-end closing and
financial reporting process, resulting in accounting errors with respect to the reconciliation of certain balance sheet accounts,
and a failure to timely review and control the preparation and closing of SimRep&rsquo;s consolidated financial statements. In
addition, SimRep also had insufficient personnel resources and technical accounting and reporting expertise to appropriately address
certain accounting and financial reporting matters in accordance with generally accepted accounting principles.</P>

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

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

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 1in">the deferred income tax process and the conversion of
foreign subsidiaries process, resulting in material accounting errors;</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>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 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 external 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">&#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</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 1in">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.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 35.4pt">Fiscal Year Ended December 31,
2013. <FONT STYLE="font-style: normal">In our assessment of our internal controls over financial reporting for the year ended December
31, 2013, we and our external 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">&#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) inadequate controls in the review and approval process of the disclosure in the financial
statements and our annual report on form 20-F, (ii) out of date whistleblower line for the Mexican subsidiaries, (iii) ineffective
controls in our patents registry, (iv) inadequate distribution and segregation of duties within the accounting department in the
Mexican subsidiaries, (v) deficient distribution to employees and officers of our code of ethics and poor promotion of strong control
environment and internal controls, (vi) failure to integrate all control processes into an Enterprise Resource Planning (ERP) system,
(vii) lack of an accounting manual with accounting instructions for our most important transactions, (viii) lack of specific procedures
to authorize and register intercompany transactions, (ix) failure to create and implement a complete training plan for our management
personnel preparing financial records, (x) limited IFRS and consolidation process understanding and reduced personnel within our
Internal Audit department which limited the scope of the management assessment, also the internal audit plan was not carried out
in full and did not include test about risk assessment, environmental, fraud and compliance with law, and only included a limited
review of the consolidated financial statements, (xi) lack of committees to review and approve all our contracts and to make risk
assessments, these activities are currently executed by selected persons only, (xii) lack of a transition plan for the establishment
of the new COSO 2013; and (xiii) insufficient resources to implement and follow up on the remedial measures identified in previous
years for the Mexican subsidiaries due to the prevalence of such deficiencies, and informal communication of deficiencies and remediation
plans;</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, assets valuation and deferred taxes, 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 authorization, control and accounting of capitalized expenditures
and related fixed assets, 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) incomplete procedures for the review process over financial
closings; (ii) incomplete documental support for authorization and extension of customer credit lines, (iii) deficient controls
in the control access to the information systems, (iv) deficient controls to review and approve inventory valuation, cost of production
calculation and cost of sales computation, (v) lack of physical inventory of fixed assets; and (vi) 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: 0.5in">Fiscal Year Ended December 31,
2014. <FONT STYLE="font-style: normal">In our assessment of our internal controls over financial reporting for the year ended December
31, 2014, we and our external 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">&#183;</FONT></TD><TD>Insufficient resources applied to the remediation and appropriate monitoring of internal control weaknesses, most of which
were identified in previous years and continue to be unresolved.</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">&#183;</FONT></TD><TD>Inadequate distribution and segregation of duties within the accounting department in the Mexican Subsidiaries due to insufficient
resources. Additionally, the internal audit staff was reduced and considered insufficient to fulfill their role.</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 detected regarding entity-level controls and control environment which, in the aggregate, constitute
a material weakness, and which include: (i) inadequate controls for the definition, review and approval process of the disclosure
in the financial statements and our annual report on form 20-F, (ii) non-operating and outdated whistleblower line for the Mexican
subsidiaries, (iii) ineffective controls in our patents registry, (iv) deficient distribution of our code of ethics to employees
and officers and poor promotion of strong control environment and internal controls in accordance with the COSO model, (v) failure
to integrate all control processes into one Enterprise Resource Planning (ERP) system, (vi) lack of an accounting manual with accounting
instructions on most of accounting records, (vii) lack of specific procedures for the approval of transactions with related parties,
(viii) failure to create and implement a complete training plan for management personnel preparing financial records, (ix) limited
IFRS and consolidation process understanding and reduced personnel within our Internal Audit department which limited the scope
of the management assessment; the internal audit plan was not carried out in full and did not include tests about risk assessment,
including environmental, fraud, compliance with laws and review of the consolidated financial statements; (x) lack of committees
to review, approve and make risk assessments of all our contracts, and (xii) informal communications of deficiencies and remediation
plan to the areas and managers involved.</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 the accounting department which impacted the financial statement closing process,
conversion of foreign subsidiaries and intercompany reconciliations, 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 properly supervise the preparation of consolidated financial
information with the detail required.</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>SimRep did not maintain effective controls relating to accounting of certain capital expenditures and related fixed assets
were found. Lastly, the evaluation for impairments is not reasonable given actual results of such Subsidiary.</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) ineffective controls and insufficient supporting documentation
for closings of periods end and financial statements review and authorization; the related procedures were incomplete and do not
include specific procedures to enter transactions into the general ledger, to select and apply accounting policies and have not
been updated in the last 3 years, which such controls are necessary to give reasonable assurance of compliance with IFRS, (ii)
no evidence of review of some account balances, such as fixed assets, sales and tax calculations by the responsible individuals;
there is also no evidence of review of the financial statements by the General Manager of Corporaci&oacute;n Aceros DM, S.A de
C.V., (iii) undocumented processes and deficient controls in the access to the information systems, (iv) deficient controls to
review and approve cost calculations of finish goods, period end costs and inventories and cost of sales report, (v) lack of physical
inventory of fixed assets in several years; and (vi) 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"><I>Fiscal Year Ended December 31, 2015</I>.
Our external auditors have incorporated into their &quot;Attestation Report of the Independent Registered Public Accounting Firms&quot;
(see item 15.C), the following assessment of our internal controls, which included 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>The internal audit department did not develop its functions to comply with the analysis of the controls during 2015, consequently,
this limited the functions of the Audit Committee.</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">&#183;</FONT></TD><TD>Insufficient resources applied to the remediation and appropriate monitoring of internal control weaknesses, most of which
were identified in previous years and continue to be unresolved.</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 distribution and segregation of duties within the accounting department in our Subsidiaries due to insufficient
resources. Additionally, the internal audit staff was considered insufficient to fulfill their role.</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 detected regarding entity-level controls and control environment which, in the aggregate, constitute
a material weakness and create a reasonable likelihood that a material misstatement of our annual and interim financial statements
will not be prevented or detected on a timely basis, such deficiencies include: (i) inadequate controls for the definition, review
and approval process of the disclosure in the financial statements and our annual report on form 20-F, (ii) whistleblower line
for our Mexican subsidiaries was not fully operational, our website information is outdated and does not include information about
our Brazilian operations, (iii) ineffective controls in our patents registry, (iv) deficient distribution of our code of ethics
to employees and officers and poor promotion of strong control environment and internal controls in accordance with the COSO model,
(v) failure to integrate all control processes into one Enterprise Resource Planning (ERP) system, (vi) lack of an accounting manual
with accounting instructions on most of accounting records, (vii) lack of specific procedures for the approval of transactions
with related parties, (viii) failure to create and implement a complete training plan for management personnel preparing financial
records under IFRS, (ix) limited IFRS and consolidation process understanding and reduced personnel within our Internal Audit department
which limited the scope; also the internal audit plan was not carried out, and therefore the audit department did not perform risk
assessment an environmental, fraud, compliance with laws, review of the consolidated financial statements and review of our annual
report on form 20-F; (x) lack of committees to review, approve and make risk assessments of all our contracts; and (xi) informal
communications of deficiencies and remediation plan to the areas and managers involved.</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 the accounting department which impacted the financial statement closing process,
conversion of foreign subsidiaries, intercompany reconciliations and a lack of controls for the issuance and authorizations of
journal entries, 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 properly supervise the preparation of consolidated financial
information with the detail required.</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>SimRep did not maintain personnel with the appropriate level of knowledge and experience of accounting and training required
to comply with financial reporting requirements. This material weakness led to the certain control deficiencies, each of which
are considered to be a material weakness. See Item 15.C &ldquo;Attestation Report of the Independent Registered Public Accounting
Firms.&rdquo;</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>Failure to provide our external auditors with evidence of the evaluation of the effectiveness of internal controls in our Brazilian
subsidiary, in addition of not hiring an external auditor for this evaluation.</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. See Item 15.C &ldquo;Attestation Report of the Independent Registered Public Accounting Firms.&rdquo;</TD></TR></TABLE>

<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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">For further details, see Items 15.B &ldquo;Controls
and Procedures&mdash;Management&rsquo;s Annual Report on Internal Control Over Financial Reporting &ndash; Material Weaknesses,&rdquo;
15.C &ldquo;Attestation Report of the Independent Registered Public Accounting Firms&rdquo; and 15.D &ldquo;Changes in Internal
Control over Financial Reporting.&rdquo;</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. On October 14,
2014, the United States International Trade Commission (USITC) determined that the U.S. steel industry is materially injured by
reason of imports of steel concrete reinforcing bars from Mexico, that are sold in the United States at less than fair value, and
from Turkey, that are subsidized by the government of Turkey. As a result of the USITC's affirmative determinations, the U.S. Department
of Commerce will issue an antidumping duty order on imports of this product from Mexico and a countervailing duty order on imports
of this product from Turkey. The U.S. government imposed tariffs of 66.7% against imports for rebar from Deacero, S.A.P.I de C.V.
and us and tariffs of 20.58% for rebar from all other imports from producers in Mexico.</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 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. Although these tariffs were eliminated in 2012, we cannot assure
you that the Mexican government will not impose these or similar tariffs in the future nor that countries seeking to export steel
products to Mexico will not impose similar tariffs on Mexican exports to those countries, which 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"><A NAME="a_Toc322026530"></A><A NAME="a_Toc322026088"></A><A NAME="a_Toc322025897"></A>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">As of December 31, 2015, approximately
80% of our non-Mexican and 53% of our Mexican employees were members of unions. The compensation terms of our labor contracts are
adjusted on an annual basis, and all other terms of the labor contracts are renegotiated every two years. In addition, collective
bargaining agreements are typically negotiated on a facility-by-facility basis for our Mexican facilities. Any failure to reach
an agreement on new labor contracts or to negotiate these labor contracts could result in strikes, boycotts or other labor disruptions.
These potential labor disruptions could have a material and adverse effect on our business. Labor disruptions or significant negotiated
wage increases could reduce our sales or increase our costs, which could in turn have a material adverse effect on our results
of operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The operations of our Lackawanna facility
depend upon certain arrangements and understandings relating to, among other things, our use of industrial water, compressed air,
sanitary sewer and electrical power. These service and utility arrangements, initially entered into with the Mittal Steel Company
N.V. and its affiliates (&ldquo;Mittal Steel&rdquo;), were effective through April 30, 2009, at which time Mittal Steel transferred
its Lackawanna plant to Tecumseh Redevelopment, Inc. (&ldquo;Tecumseh&rdquo;). In December 2010, Tecumseh transferred a portion
of the former Mittal Steel facility to Great Lakes Industrial Development, LLC (&ldquo;GLID&rdquo;). Upon the transfer to GLID,
we entered into a written agreement with GLID regarding the provision of compressed air to our facility. This lease assures that</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 2015, 2014, 2013, 2012 and 2011, sales to our ten largest customers in the United States accounted
for approximately 56.8%, 51.4%, 40.6%, 42.4% and 40.4% of our consolidated revenues in the United States, respectively, and approximately
21.5%, 23.6%, 21.1%, 18.7 and 19.5% 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 or at all. 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">Negative trends in the operation in our United
States segment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our significant investment in the new
Lorain electric arc furnace behind the growth prospects in the United States oil and gas drilling and exploration was the major
contributor to operational losses incurred in the past two years, 2014 and 2015. Additionally, the U.S.$15 million Electric Bottom
Tapping Furnace investment in 2012 at the Canton facility to drive operational and productivity improvements created an initial
challenge to master the new technology which drove operational losses in 2013 in our United States segment. In response to the
severe economic downturn in the energy exploration sector that caused a precipitous drop in demand for seamless pipe, the entire
Lorain facility was temporarily idled. This has had the effect of halting the significant losses and allowed the business to focus
more on other industries into which we supply product (mainly the automotive industry) where demand for our products remains strong.
The benefits of the 2012 productivity investment in Canton is now bearing fruit with a more streamlined production process that
has substantially reduced operational costs, improved cash flows and driven a positive EBITDA. Our ongoing focus of driving operational
efficiencies, improving quality and customer service will serve the business well in the months and years ahead with sustainable
levels of profitability and growth, however we cannot assure you that a new economic downturn in the future could not materially
and adversely affect our business, results of operations, liquidity and financial condition.</P>


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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Most of our automotive parts customers
in Mexico and the United States require that we have ISO 9001, TS 16949 and ISO 14001 certification. All of the Mexican and U.S.
facilities that sell to automotive parts customers are currently certified, as required. If the foregoing certifications are canceled,
approvals are withdrawn or 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 that we will be able to maintain these required certifications.</P>

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

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026531"></A><A NAME="a_Toc322026089"></A><A NAME="a_Toc322025898"></A>Failure
to comply with environmental laws and regulations may result in fines, penalties or other significant liabilities or prevent us
from operating our facilities.</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. &ldquo;Financial Information&mdash;Legal
Proceedings.&rdquo;</P>

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<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 steel making operations in the United
States and in Mexico use electric arc furnaces where carbon dioxide generation is primarily linked to energy use. In the United
States, the Environmental Protection Agency has issued rules imposing inventory and reporting obligations to which some of our
facilities are subject, and has also issued rules that will affect preconstruction permits for our facilities where increases in
greenhouse gas pollutants are contemplated. The U.S. Congress has debated various measures for regulating greenhouse gas emission
(such as carbon dioxide) and may enact them in the future. Such laws and regulations may also result in higher costs for coking
coal, natural gas and electricity generated by carbon-based systems (such as coal-fired electric generating facilities). Canada&rsquo;s
federal government is also considering various approaches for reducing greenhouse gas emissions, although we do not presently believe
Republic&rsquo;s Hamilton, Ontario facility would be significantly impacted by these efforts since it is not a steel-producing
facility. Such future laws and regulations, whether in the form of cap-and-trade emissions permit system, a carbon tax or other
regulatory regime may have a negative effect on our operations. Climate change policy is evolving at regional, national and international
levels, and political and economic events may significantly affect the scope and timing of climate change measures that are ultimately
put in place. As signatories to the United Nations Framework Convention on Climate Change (the &quot;UNFCCC&quot;), Mexico, the
U.S. and Canada are subject to the Paris Agreement to fight climate change, which was taken by the parties at the 21st session
of the UNFCCC conference of the Parties in 2015. As a result, some of our significant facilities may ultimately be subject to future
regional, provincial and/or federal climate change regulations to manage greenhouse emissions. 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"><A NAME="a_Toc322026532"></A><A NAME="a_Toc322026090"></A><A NAME="a_Toc322025899"></A>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 June 30, 2016, 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026533"></A><A NAME="a_Toc322026091"></A><A NAME="a_Toc322025900"></A>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 our affiliates, including entities that Industrias CH owns or controls. We expect
that in the future we will continue to enter into transactions with our affiliates, and some of these transactions may be significant.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Taxes payable by companies in the countries
in which we operate are substantial and include income tax, value-added tax, excise duties, profit taxes, payroll related taxes,
property taxes and other taxes. Tax laws and regulations in some of these countries may be subject to change, varying interpretation
and inconsistent enforcement. Ineffective tax collection systems and continuing budget requirements may increase the likelihood
of the imposition of onerous taxes and penalties which could have a material adverse effect on our financial condition and results
of operations. In addition to the usual tax burden imposed on taxpayers, these conditions create uncertainty as to the tax implications
of various business decisions. This uncertainty could expose us to significant fines and penalties and to enforcement measures
despite our best efforts at compliance, and could result in a greater than expected tax burden. In addition, many of the jurisdictions
in which we operate, 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"><A NAME="a_Toc322026534"></A><A NAME="a_Toc322026092"></A><A NAME="a_Toc322025901"></A>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 latest
financial crisis and economic recession that occurred during 2008 and 2009, may significantly impact our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The financial crisis that began in the
United States in 2008 led to a global recession in which overall economic activity decreased across the world generally and in
North America in particular. The corresponding reduction in demand across the economy in general and in the automotive, construction
and manufacturing sectors in particular has reduced demand for steel products in North America and globally. These economic conditions
significantly impacted our business and results of operations. Although demand, production levels and prices in certain segments
and markets have recovered and stabilized to a certain degree, the extent, timing and duration of</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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. We sell our products to the automotive and construction-related industries, both
of which reported substantially lower customer demand during and after the latest global recession. As a result, our operating
levels declined compared to pre-recession levels. While some of our end-product markets, such as the automotive industry, experienced
recoveries during 2011, 2012, 2013, 2014 and 2015. In addition to slackening demand by end consumers, we believe that some of our
customers continue to experience and may experience in the future 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.
Moreover, if a new global economic downturn occurs, we may face increased risk of insolvency and other credit related issues of
our customers and suppliers, as we faced with our customers and suppliers particularly in industries that were hard hit by the
latest recession, such as automotive, construction and appliance. Also, there is the possibility that our suppliers may face similar
risks. A 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. The impact of global economic conditions
on these industries may have a significant effect on our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Additionally, if global economic conditions
deteriorate, we may be required to undertake asset impairments, as we have been required to undertake in the past.</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 62% of our net sales of SBQ in 2015. Demand for our products is affected
by, among other things, the relative strength or weakness of the North American automotive industry. A reduction in vehicles manufactured
in North America, the principal market for Republic&rsquo;s SBQ steel products, would have an adverse effect on our results of
operations. We also sell to independent forgers, components suppliers and steel service centers, all of which sell to the automotive
market as well as other markets. Developments affecting the North American automotive industry may adversely affect us.</P>

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

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

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026537"></A><A NAME="a_Toc322026095"></A><A NAME="a_Toc322025904"></A>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>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026538"></A><A NAME="a_Toc322026096"></A><A NAME="a_Toc322025905"></A>Risks
Related to Mexico</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc323315308"></A><A NAME="a_Toc323310712"></A><A NAME="a_Toc323254050"></A><A NAME="a_Toc323253659"></A><A NAME="a_Toc323253336"></A><A NAME="a_Toc323247035"></A><A NAME="a_Toc323246757"></A><A NAME="a_Toc322026542"></A><A NAME="a_Toc322025906"></A><A NAME="a_Toc322026097"></A><A NAME="a_Toc322026539"></A><A NAME="p22"></A><B><I>Adverse
economic conditions in Mexico may adversely affect our financial performance.</I></B></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 latest 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%, in 2011 and 2012 grew by 3.9%, in 2013 grew by 1.1%, in 2014 grew by 2.3% and in 2015 grew 2.5%, 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, changes in oil prices, 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. The
Mexican government recently cut spending in response to a downward trend in international crude oil prices, and it may further
cut spending in the future. These cuts could adversely affect the Mexican economy and, consequently, our business, financial condition,
operating results and prospects. 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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322025907"></A><A NAME="a_Toc322026098"></A><A NAME="a_Toc322026540"></A><B><I>Political,
social and other developments in Mexico could adversely affect our business.</I></B></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. Social unrest, such as strikes, suspension of labor, demonstrations, acts of violence
and terrorism in the Mexican states in which we operate could disrupt our financial performance. 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 current political situation or
future developments in Mexico, over which we have no control, will not have an adverse effect on our business, financial condition
or results of operations. Further, 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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B><I>The Mexican government has exercised, and continues
to exercise, significant influence over the Mexican economy.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican federal government has exercised,
and continues to exercise, significant influence over the Mexican economy. Accordingly, Mexican federal governmental actions and
policies concerning the economy, state-owned enterprises and state controlled, funded or influenced financial institutions could
have a significant impact on private sector entities in general and on us in particular, and on market conditions, prices and returns
on securities of Mexican companies. The Mexican federal government occasionally makes significant changes in policies and regulations,
and may do so again in the future. Actions to control inflation and other regulations and policies have involved, among other measures,
increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on imports.
Tax legislation in Mexico is subject to continuous change and we cannot assure you whether the Mexican government may maintain
existing political, social, economic or other policies, or whether changes may have a material adverse effect on our financial
performance.</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexican drug related violence and other
organized crime have escalated significantly since 2006, when the Mexican federal government began increasing the use of the army
and police to fight drug trafficking. Drug cartels have carried out attacks largely directed at competing drug cartels and law
enforcement agents, however they also target companies and their employees, including companies&rsquo; industrial properties, including
through extortion, theft from trucks or industrial sites, kidnapping and other forms of crime and violence. This increase in violence
and criminal activity has led to increased costs for companies in the form of stolen products and added security and insurance.
Corruption and links between criminal organizations and authorities also create conditions that affect our business operations,
as well as extortion and other acts of intimidation, which may have the effect of limiting the level of action taken by federal
and local governments in response to such criminal activity. We cannot assure you that the levels of violent crime in Mexico, over
which we have no control, will not have an adverse effect on the country&rsquo;s economy and, as a result, on our financial performance.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The peso historically has been subject
to significant depreciation against the U.S. dollar. 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. The Mexican
Central Bank may from time to time participate in the foreign exchange market to minimize volatility and support an orderly market.
The Mexican Central Bank and the Mexican government have also promoted market-based mechanisms for stabilizing foreign exchange
rates and providing liquidity to the exchange market, such as using over-the-counter derivatives contracts and publicly-traded
futures contracts on the Chicago Mercantile Exchange. However, the Peso is currently subject to significant fluctuations against
the U.S. dollar and may be subject to such fluctuations in the future. 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. 17.36 to U.S.$1.00 in December
14, 2015. In 2015 the exchange rate registered a low of Ps. 14.56 to U.S.$1.00 and a high of Ps. 17.36 to U.S.$1.00.<B> </B></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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 17, 2015, a day after the
U.S. Federal Reserve increased the target range for the federal funds rate in the United States by 25 basis points, the Mexican
Central Bank increased the reference rate from 3.00% to 3.25% in an effort to counteract a sharp depreciation of the Mexican peso
that could affect Mexico&rsquo;s expected rate of inflation. On February 17, 2016, the Mexican Central Bank further increased the
reference rate from 3.25% to 3.75%. We cannot assure you that, as a result of future increases by U.S. Federal Reserve of the target
range for the federal funds rate in the United States, the Mexican economy or the value of securities issued by Mexican companies
will not be affected, including as a result of any precipitous unwinding of investments in emerging markets, depreciations and
increased volatility in the value of their currency and higher interest rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026099"></A><A NAME="a_Toc322026541"></A><B><I>High
inflation rates in Mexico may affect demand for our products and result in cost increases.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexico has historically experienced high
annual rates of inflation. The annual rate of inflation, as measured by changes in the Mexican national consumer price index (<I>&Iacute;ndice
Nacional de Precios al Consumidor</I>) published by the Mexican Central Bank was 3.8% for 2011, 3.6% for 2012, 4.0% for 2013, 4.1%
for 2014 and 2.1% for 2015. High inflation rates could adversely affect our business and results of operations by reducing consumer
purchasing</P>


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, in recent years economic
conditions in Mexico have become increasingly correlated with economic conditions in the United States as a result of NAFTA, increased
economic activity between the two countries, and the remittance of funds from Mexican immigrants working in the United States to
Mexican residents. Therefore, adverse economic conditions in the United States, the termination of, or modifications to, NAFTA
or other related events could have a significant adverse effect on the Mexican economy. Moreover, the recent debt crisis in the
European Union, the August and September 2015 Chinese stock market crashes, changes in Chinese exchange rate policy, continuing
concerns regarding the slowdown of the Chinese economy, recent terrorist attacks and recent sharp declines in the price of crude
oil, may also affect the global and Mexican economies. 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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B><I>We could be adversely affected by violations of the
Mexican Federal Anticorruption Law in Public Contracting, the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery
laws.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.25in">The Mexican Federal Anticorruption Law
(<I>Ley Federal de Anticorrupci&oacute;n en Contrataciones P&uacute;blicas</I>), the U.S. Foreign Corrupt Practices Act and similar
worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to government officials
and other persons for the purpose of obtaining or retaining business. There can be no assurance that our internal control policies
and procedures will protect us from reckless or criminal acts committed by our employees or agents. Violations of these laws, or
allegations of such violations, could disrupt our business and could have an adverse effect on our business, financial condition
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B><I>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.</I></B></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, issued by the International Accounting
Standard Board (IASB); consequently, 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 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. Items on the financial statements of a company prepared in accordance with IFRS may not reflect its financial position
or results of operations in the way they would be reflected had such financial statements been prepared in accordance with 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>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B><I>Mexico has different corporate disclosure and accounting
standards than those in the United States and other countries.</I></B></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,
including accounting 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. The disclosure standards imposed by the Mexican Stock Exchange may be different than those imposed by securities
exchanges in other countries or regions such as the United States.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B><I>Brazilian political and economic conditions, and the
Brazilian government&rsquo;s economic and other policies, may negatively affect demand for our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Brazilian economy has been characterized
by frequent and occasionally extensive intervention by the Brazilian government and unstable economic cycles. The Brazilian government
has often changed monetary, taxation, credit, tariff and other policies to influence the course of Brazil&rsquo;s economy. The
Brazilian government&rsquo;s actions to control inflation and implement other policies have at times involved wage and price controls,
blocking access to bank accounts, imposing capital controls and limiting imports into Brazil.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our results of operations and financial
condition may be adversely affected by factors such as:</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: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>fluctuations in exchange rates;</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-family: Symbol">&#183;</FONT></TD><TD>exchange control 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: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>interest rates;</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-family: Symbol">&#183;</FONT></TD><TD>inflation;</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-family: Symbol">&#183;</FONT></TD><TD>tax 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: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>expansion or contraction of the Brazilian economy, as measured by rates of growth in GDP;</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-family: Symbol">&#183;</FONT></TD><TD>liquidity of domestic capital and lending markets; 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: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>other political, diplomatic, social and economic developments in or affecting Brazil.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Brazilian markets have been experiencing
heightened volatility due to the uncertainties derived from the ongoing <I>Lava Jato</I> investigation, which is being conducted
by the Office of the Brazilian Federal Prosecutor, and its impact on the Brazilian economy and political environment. Members of
the Brazilian federal government and of the legislative branch, as well as senior officers of the state-owned oil company Petr&oacute;leo
Brasileiro S.A. &ndash; Petrobras, or Petrobras, have faced allegations of political corruption. These government officials and
senior officers allegedly accepted bribes by means of kickbacks on contracts granted by Petrobras to several infrastructure, oil
and gas and construction companies. As a result of the ongoing <I>Lava Jato</I> investigation, a number of senior politicians,
including congressman and officers of the major state-owned companies in Brazil resigned or have been arrested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, the Brazilian Congress opened
impeachment proceedings against President Dilma Rousseff on December 2, 2015 for allegedly breaking budget laws as she increased
economic stimulus during her re-election campaign last year. On April 17, 2016, the Brazilian Congress voted in favor of the admissibility
of the impeachment proceedings and the Brazilian Senate is expected to vote on the impeachment on May 11, 2016. On August 31, 2016,
the Brazilian Senate voted in favor of the dismissal of President Dilma Rousseff. This situation has adversely affected and we
expect that they will continue to adversely affect the Brazilian markets and trading prices</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">of securities issued by Brazilian issuers. We cannot predict
their effects on the Brazilian economy 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">The potential outcome of these investigations
and proceedings is uncertain, but they have adversely affected and we expect that they will continue to adversely affect the Brazilian
markets and trading prices of securities issued by Brazilian issuers. We cannot predict whether the allegations or proceedings
will lead to further political and economic instability or whether new allegations against government officials or other companies
in Brazil will arise in the future. In addition, we can neither predict the outcome of any such allegations and proceedings nor
their effect on the Brazilian economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In addition, the Brazilian steel sector
is facing a severe crisis. According to the Brazilian Steel Institute, steel consumption fell by 14% in the first nine months of
2015. We believe this crisis is largely due to a sharp decrease in durable goods manufacturing, particularly motor vehicle production,
which is depressing steel consumption and offsetting the positive impact of construction activity associated with the summer 2016
Olympic Games held in Rio de Janeiro. The crisis in the Brazilian steel sector could have a material and adverse effect on our
Brazilian business segment.</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"><A NAME="a_Toc462142416"></A><FONT STYLE="color: #010000">Item&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000">4.<FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Information
on the Company</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc322026543"></A><A NAME="a_Toc322026101"></A><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"><A NAME="a_Toc322026544"></A><A NAME="a_Toc322026102"></A>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,
Canada and Brazil. We believe that in 2011, 2012, 2013, 2014 and 2015 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, 2012, 2013, 2014 and 2015 we were
an important producer of structural and light structural steel products in Mexico in terms of sales volume.</P>

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

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026545"></A><A NAME="a_Toc322026103"></A>Our
History</P>

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


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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 24, 2007 we purchased 99.95%
of the shares of three subsidiaries of Grupo TMM S.A de C.V. These three subsidiaries were TMM Am&eacute;rica, S.A. de C.V., TMM
Continental, S.A. de C.V. and Mutimodal Dom&eacute;stica, S.A. de C.V. Following the purchase, these companies have engaged in
marketing steel. In February 2008, the names of these three companies were changed to CSG Comercial, S.A. de C.V., Comercializadora
de Productos de Acero de Tlaxcala, S.A. de C.V. and Sider&uacute;rgica de Baja California, S.A. de C.V.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 30, 2008, we acquired all the
capital stock of Aceros DM and certain affiliated companies (&ldquo;Grupo San&rdquo;) for a total cost of approximately Ps. 8,730
million (U.S.$844 million at the exchange rate at that time). Grupo San is a long products steel mini-mill and the second-largest
corrugated rebar producer in Mexico. Grupo San&rsquo;s operations are based in San Luis Potos&iacute;, Mexico. Its plants has a
production capacity of 600 thousand tons of finished products annually.</P>

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

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

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


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<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. In November 2015, our steel plant in Brazil started operations. This facility has a production capacity of 450,000
tons of finished goods of rebar and wire, and 800 employees. We have already established contact with major local suppliers of
raw materials. The next step is to attract the special steels market for the automotive and electro-welded wire derivatives products.</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 at the exchange
rate at that time). 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, we, through two
of our wholly owned subsidiaries (Solon Wire Processing LLC, and the newly formed Republic Memphis LLC), acquired certain plants,
machinery and equipment from BCS Industries LLC and affiliates (&ldquo;Bluff City Steel&rdquo;), which was our customer and vendor.
For these assets we paid U.S.$2.5 million in cash and forgave approximately U.S.$6 million due by Bluff City Steel to us.</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>


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<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 thousand,
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, the merger of Procesadora
Industrial San S.A. de C.V. into Malla San S.A. de C.V. (subsidiaries of Grupo San) was authorized in their respective Extraordinary
Shareholders Meetings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On 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 working capital required to fund such receivables. The agreement
had 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. No notice was provided in 2015. 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 U.S.$ 30 million.
Proceeds on the transfer reflect the face value of the account minus 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, minus 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. 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. As collateral for the repayment of advances for receivables sold, the purchaser has a
priority security interest in all accounts receivable of Republic Steel, Inc. Republic Steel, Inc. sold a face amount of U.S.$
29.0 million and U.S.$ 33.9 million of accounts receivable to the purchaser during the years ended December 31, 2015 and 2014,
respectively. Discount fees incurred pursuant to this agreement were approximately U.S.$ 0.5 million for each of the years ended
December 31, 2015 and 2014, respectively. Of the face amount of accounts receivable sold to the purchaser, U.S.$ 3.4 million had
not been collected by the purchaser at December 31, 2015, and therefore, such amount is subject to possible 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 the Mexican Income 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. On September 24, 2013, the second district judge denied the
shelter and protection of the federal courts against the company pursuant to Article 32, Section XVII of the Mexican Income Tax
Law, arguing that constitutional guaranties were not violated. Dissatisfied with the decision, the company filed an application
for review of such judgment with the Mexican Supreme Court of Justice. The Supreme Court resolved that the constitutionality of
Article 32, Section XVII of the Mexican Income Tax Law was not violated arguing that the Income Tax Law does not violate the guaranties
of tax fairness and proportionality under Article 31, section IV of the Mexican Constitution. As a result, tax losses of the company
may only be applied against future gains related to dispositions of securities.</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>

<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 our subsidiary
Corporacion ASL, S.A. de C.V. 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.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 Class &quot;I,&quot; series
&quot;B&quot; share, which represents 0.01% of the shares of such class, and 53,564,127 Class &quot;II,&quot; series &quot;L&quot;
shares, 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 us, 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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On December 18, 2012 in an extraordinary
shareholders meeting of Simec International 6, S.A. de C.V., the split of this company was approved and two new wholly owned Mexican
subsidiaries were incorporated, under the names Simec International 8, S.A. de C.V. and Siminsa E, S.A. de C.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In May 2013, Malla San, S.A. de C.V.,
operator of the plant which produces mesh and wire derivatives in San Luis Potosi, split into two new entities, Malla San 1 S.A.
de C.V. and Malla San 2 S.A. de C.V., and therefore ceased to exist.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On August 8, 2013, we and our subsidiary
Simec International, S.A. de C.V. purchased shares of a company called Seehafen Operadora Maritima, S.A.P.I. de C.V. (Seehafen)
for Ps. 44 million. The shares acquired correspond to (i) 500 ordinary, nominative Class &ldquo;I&rdquo; shares, representative
of the fixed portion of the capital stock of Seehafen, which represents 50% of the shares of such class and (ii) 99,000 nominative
Class &ldquo;II&rdquo; shares, representative of the variable portion of the capital stock of Seehafen, which represents 100 %
of the shares of such class. These shares are without par value and Class &ldquo;II&rdquo; shares confer no voting rights. The
transactions described above were approved in an extraordinary shareholders meeting of Seehafen celebrated on the same date, which
also approved its change of name to Simec International 9, S.A.P.I. de C.V. (Simec 9), the modification of its corporate purpose
and the appointment of members to its Board of Directors, comprised exclusively of officers and shareholders of us, therefore,
from that date on, we consolidate the financial statements of Simec 9. Seehafen was incorporated on August 3, 2012 through a split
and tax losses of Ps. 983 million were transferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 20, 2013, the merger of Simec
USA, Corporation and Simec International 5, Inc. was authorized in their respective extraordinary shareholders meetings, whereby
the first entity subsisted and the second ceased to exist.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On November 30, 2013 and December 2,
2013, the merger of Compa&ntilde;&iacute;a Sider&uacute;rgica del Pac&iacute;fico, S.A. de C.V., Comercializadora Msan S.A. de
C.V., Comercializadora de Productos de Acero de Tlaxcala, S.A. de C.V., Productos Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.,
Comercializadora Simec, S.A. de C.V., Siminsa E, S.A. de C.V., and Sider&uacute;rgica de Baja California, S.A. de C.V. was authorized
in their respective extraordinary shareholders meetings, whereby the first entity subsisted and the others ceased to exist.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On January 16, 2015, we entered into
a cooperation agreement with the government of the State of Tlaxcala, Mexico, to build a new steel facility, which will have a
production capacity of 600,000 tons of bar quality steel (SBQ). In October and December 2015, we acquired land adjacent to our
existing plant in Tlaxcala, which will increase the extension to a total of 100 hectares. On October 20, 2015, we entered into
an agreement with Danieli &amp; Officine Meccaniche for the construction (excluding civil engineering) of the plant and the provision
of all required equipment. The total budget for the project will be approximately U.S.$600 million, which will be financed with
our own resources, with a construction period of two years and an estimated pre-operating period of between six to eight months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On January 20, 2015, we incorporated
a new wholly-owned subsidiary named Aceros Especiales Simec Tlaxcala, S.A. de C.V., in which Grupo Simec, S.A.B. de C.V. holds
49,999 class &quot;I&quot; shares and Simec International, S.A. de C.V. holds one class &quot;I&quot; share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On January 20, 2015, we incorporated
a new wholly-owned subsidiary named Recursos Humanos de la Industria Sider&uacute;rgica de Tlaxcala, S.A. de C.V., in which Grupo
Simec, S.A.B. de C.V. holds 49,999 class &quot;I&quot; shares and Simec International, S.A. de C.V. holds one class &quot;I&quot;
share.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On March 21, 2015, we and our subsidiary
Simec International, S.A. de C.V. purchased 2,500 class &quot;I1&rdquo;, ordinary, nominative and without par value shares of a
company called RRLC, S.A.P.I. de C.V. (RRLC), representing the fixed portion of its capital stock, which represented 50% of the
shares of such class, and 46,103 class &quot;II&rdquo;, non-voting, nominative, without par value shares of RRLC, representing
the variable portion of its capital stock, which represented 100% of the shares of that class, in the aggregate amount of Ps. 18.6
million. RRLC was incorporated as a result of a spin-off of another company on December 11, 2014, with a tax loss of Ps. 311.5
million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On October 30, 2015, our subsidiaries
Simec international 7, S.A. de C.V. and Simec International, S.A. de C.V., acquired 25,000 class &quot;I&rdquo;, ordinary, nominative
and without par value shares in a company called Grupo Chant, S.A.P.I. de C.V. (Chant), representing the fixed portion of its capital
stock, which represented 50% of the shares of such class, and 1,000,000 class &quot;II&rdquo;, non-voting, nominative and without
par value shares of Chant, representing the variable portion of its capital stock, which represented 100% of the shares of that
class, in the aggregate amount of Ps. 167 million. Chant was incorporated as a result of a spin-off of another company on June
12, 2015, with a tax loss of Ps. 2,380 million.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026546"></A><A NAME="a_Toc322026104"></A>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 2016 will be approximately Ps. 3,059.9 million (U.S.$176.5 million), consisting of Ps. 34.7 million (U.S.$2 million)
of estimated capital expenditures in our Republic facilities, Ps. 2,994 million (U.S.$172.7 million) of capital expenditures in
our facilities in Mexico and Ps. 31.2 million (U.S.$1.8 million) for the construction of a new steel facility in Brazil. Nevertheless,
this estimate is subject to certain uncertainties and actual capital expenditures in 2016 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 2015, we spent Ps. 0.4 million (U.S.$0.02
million) on capital investments at the Lorain, Ohio facility. We spent Ps. 574.2 million (U.S.$35.9 million) on capital improvements
at our facilities in Mexico, including Ps. 509.2 million (U.S.$31.8 million) at the Apizaco facility, Ps. 43.1 million (U.S.$2.7
million) at the Mexicali facility, Ps. 7.4 million (U.S.$0.5 million) at the Guadalajara facility, and Ps. 14.5 million (U.S.$0.9
million) at the San Luis facilities. We also spent Ps. 73.1 million (U.S.$4.6 million) in the construction of a new steel facility
on Pindamonhangaba, Sao Paulo State, Brazil, which in November 2015 started operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2014, we spent Ps. 924.2 million (U.S.$69.3
million) on capital investments for Republic&rsquo;s facilities, including Ps. 828.2 million (U.S.$62.1 million) at the Lorain,
Ohio facility, Ps. 5.3 million (U.S.$0.4 million) at the Lackawanna, New York facility, Ps. 73.3 million (U.S.$5.5 million) at
the Canton, Ohio facility, Ps. 4 million (U.S.0.3 million) at our corporate location in Ohio, Ps. 6.7 million (U.S.$0.5 million)
at the Massillon, Ohio facility, Ps. 4 million (U.S.0.3 million) at the Solon, Ohio facility, and Ps. 2.7 million (U.S.$0.2 million)
at the Gary, Indiana, facility. We spent Ps. 198.8 million (U.S.$14.9 million) on capital improvements at our facilities in Mexico,
including Ps. 72.3 million (U.S.$5.4 million) at the Apizaco facility, Ps. 14.5 million (U.S.$1.1 million) at the Mexicali facility,
Ps. 35.2 million (U.S.$2.6 million) at the Guadalajara facility, and Ps. 76.8 million (U.S.$5.8 million) at the San Luis facilities.
We also spent Ps. 735.3 million (U.S.$55.3 million) in the construction of a new steel facility on Pindamonhangaba, Sao Paulo State,
Brazil.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2013, we spent Ps. 1,266.3 million
(U.S.$99.7 million) on capital investments for Republic&rsquo;s facilities, including Ps. 1,155 million (U.S.$88.4 million) at
the Lorain, Ohio facility, Ps. 1.3 million (U.S.$0.1 million) at the Lackawanna, New York facility, Ps. 81 million (U.S.$6.2 million)
at the Canton, Ohio facility, Ps. 18.3 million (U.S.1.4 million) at our corporate location in Ohio, Ps. 2.6 million (U.S.$0.2 million)
at the Massillon, Ohio facility, Ps. 7.8 million (U.S.0.6 million) at the Solon, Ohio facility, and Ps. 0.3 million (U.S.$0.02
million) at the Hamilton, Ontario, Canada facility. We spent Ps. 308.4 million (U.S.$23.6 million) on capital improvements at our
facilities in Mexico, including Ps. 211.7 million (U.S.$16.2 million) at the Apizaco facility, Ps. 3.8 million (U.S.$0.3 million)
at the Mexicali facility, Ps. 20.4 million (U.S.$1.6 million) at the Guadalajara facility, and Ps. 72.5 million (U.S.$5.5 million)
at the San Luis facilities. We also spent Ps. 1,603.5 million (U.S.$122.7 million) in the construction of a new steel facility
in Pindamonhangaba, Sao Paulo State, Brazil.</P>


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<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>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, Mexico and Brazil,
we own and operate fifteen state-of-the-art steel making, processing and/or finishing facilities with a combined annual crude steel
installed production capacity of 4.6 million tons and a combined annual installed rolling capacity of 4.3 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">&#183;</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">&#183;</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">&#183;</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">&#183;</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">&#183;</FONT></TD><TD>two mini-mills in San Luis Potos&iacute;, San Luis Potos&iacute;, Mexico and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" 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 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>

<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 mini-mill and rebar and wire rod rolling mill in Pindamonhangaba; S&atilde;o Paulo, Brazil.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2015, we had net sales of Ps. 24.5
billion, gross loss of Ps. 693 million and net loss of Ps. 3.3 billion. In 2015, approximately 40% of our consolidated sales were
in the United States and Canada, approximately 59% were in Mexico, and approximately 1% were exports to other markets outside North
America.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026547"></A><A NAME="a_Toc322026105"></A>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 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><FONT STYLE="font-weight: normal">Improving our cost
structure.</FONT></P>

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

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

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

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

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


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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026548"></A><A NAME="a_Toc322026106"></A>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>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>I-beams</I>. I-beams, also known as standard beams, are &ldquo;I&rdquo; form steel structural sections with two equal parallel
sides joined together by the center with a transversal section, forming 90&ordm; angles. We produce I-beams in our Mexican facilities
and they are mainly used by the industrial construction sector as structure supports.</TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Channels</I>. Channels, also known as U-Beams because of their &ldquo;U&rdquo; form, are steel structural sections with
two equal parallel sides joined together by its ends with a transversal section, forming 90&ordm; angles. We produce channels in
our Mexican facilities and they are mainly used by industrial construction sector as structure supports and for stocking systems.</TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Angles</I>. Angles are two equal sided sections joined by their ends with a 90&ordm; angle, in an &ldquo;L&rdquo; form.
We produce angles in our Mexican facilities and they are used mainly by the construction and furniture industries as joist structures
and framing systems.</TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Hot rolled bars</I>. Hot rolled bars are round, square and hexagonal steel bars that can be made of special or commodity
steel. The construction, auto part and furniture industries mainly use the round and square bars. The hexagonal bars are made of
special steel and are mainly used by the hand tool industry. We produce the steel sections in our Mexican and U.S. facilities.</TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Flat bars</I>. Flat bars are rectangular steel sections that can be made of special or commodity steel. We produce flat
bars at our Mexican facilities. The auto part industry mainly uses special steel as springs, and the construction industry uses
the commodity steel flat bars as supports.</TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Rebar</I>. Rebar is reinforced, corrugated round steel bars with sections from 0.375 to 1.5 inches in diameter, and we produced
rebar our Mexican facilities. Rebar is only used by the construction industry to reinforce concrete. Rebar is considered a commodity
product due to its general acceptance by most consumers of industry standard specifications.</TD></TR></TABLE>

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<TD STYLE="width: 35.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><I>Cold-finished bars</I>. Cold-finished bars are round and hexagonal SBQ steel bars transformed through a diameter reduction
process. This process consists of (1) reducing the cross sectional area of a bar by drawing the material through a die without
any pre-heating or (2) turning or &ldquo;peeling&rdquo; the surface of the bar. The process changes the mechanical properties of
the steel, and the finished product is accurate to size, free from scale with a bright surface finish. We produce these bars in
our Mexican, U.S. and Canadian facilities, and mainly the auto part industry uses them.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" 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>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>


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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><A NAME="a_Toc322026549"></A><A NAME="a_Toc322026107"></A>Steel
Product Sales Volume</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="width: 9%; 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</B></P></TD>
    <TD STYLE="width: 9%; 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>2013</B></P></TD>
    <TD STYLE="width: 9%; 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>2014</B></P></TD>
    <TD STYLE="width: 9%; 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>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(thousands of tons)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; font-size: 10pt; text-align: left; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">I-Beams&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">72.8</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">77.7</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">66.2</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">71.7</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">83.2</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; font-size: 10pt; text-align: left; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Channels&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62.1</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">66.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">64.1</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62.7</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">63.3</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; font-size: 10pt; text-align: left; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Angles<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">159.3</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">152.1</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">142.2</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">164.3</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">182.3</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hot-rolled bars (round, square and hexagonal rods)&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">954.5</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">871.7</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">781.6</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">823.2</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">666.9</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; font-size: 10pt; text-align: left; padding-left: 0; text-indent: 0"><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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">101.0</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">97.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">92.3</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">94.5</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">183.1</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">536.4</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">627.5</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">568.5</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">567.4</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">577.8</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cold finished bars&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">181.2</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">192.0</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">195.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">207.5</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">126.3</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other semi-finished trade products<SUP>(2)</SUP>&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">72.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">42.1</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">23.6</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">130.8</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">89.4</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Electro-Welded wire mesh&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">22.1</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.7</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">21.7</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Wire rod&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">37.7</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">21.4</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">27.2</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.2</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.8</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Electro-Welded wire mesh panel&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">34.5</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">26.9</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25.2</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">19.9</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">22.8</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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">54.2</P></TD>
    <TD STYLE="vertical-align: bottom; 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">66.6</P></TD>
    <TD STYLE="vertical-align: bottom; 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">56.7</P></TD>
    <TD STYLE="vertical-align: bottom; 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">25.1</P></TD>
    <TD STYLE="vertical-align: top; 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">5.3</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 22pt; font-size: 10pt; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total steel sales&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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 1.5pt double">2,288.7</P></TD>
    <TD STYLE="vertical-align: bottom; 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 1.5pt double">2,261.7</P></TD>
    <TD STYLE="vertical-align: bottom; 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 1.5pt double">2,064.4</P></TD>
    <TD STYLE="vertical-align: bottom; 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 1.5pt double">2,197.0</P></TD>
    <TD STYLE="vertical-align: top; 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 1.5pt double">2,025.9</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0; font-size: 10pt; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD></TR>
</TABLE>
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 6in 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: 0"><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 2015, approximately
46% of our steel product sales in tons represented SBQ steel products, of which we sold 63% to the auto part industry, 15% to service
centers, 3% for hand tools, 1% for mining equipment and the remaining 18% to other industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2015, direct sales in tons to the
automotive industry increased by 18% compared to 2014. In 2014, direct sales in tons to the automotive industry increased by 44%
compared to 2013. In 2013, direct sales in tons to the automotive industry decreased by 16% compared to 2012. In 2012, direct sales
in tons to the automotive industry decreased 2% compared to 2011. 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, 2012, 2013, 2014 and 2015
sales in tons to the energy sector accounted 0.4%, 0.9%, 0.5%, 10% and 0.01%, respectively, of our sales of SBQ steel products.</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 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 in tons.</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 CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Mexico</B></P></TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>United States,
        Canada and Other Countries</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2012</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2013</B></P></TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2014</B></P></TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2015</B></P></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2012</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2013</B></P></TD>
    <TD STYLE="vertical-align: top; padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2014</B></P></TD>
    <TD STYLE="vertical-align: top; padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">I-Beams&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">97%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">96%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">97%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">99%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">98%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">3%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">4%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">3%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">1%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">2%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Channels&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">55%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">50%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">51%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">44%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">54%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">45%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">50%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">49%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">56%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">46%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Angles&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">76%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">75%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">78%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">75%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">82%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">24%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">25%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">22%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">25%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">18%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Hot-rolled bars (round, square and hexagonal rods)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">28%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">29%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">30%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">33%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">36%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">72%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">71%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">70%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">67%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">64%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Flat bar&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">88%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">78%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">91%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">99%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">92%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">12%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">22%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">9%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">1%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">8%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Rebar&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">97%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">99%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">3%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">1%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Cold drawn finished bars&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">42%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">46%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">49%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">54%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">66%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">58%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">54%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">51%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">46%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">34%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Other semi-finished trade products&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Electro-Welded wire mesh&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Wire rod&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">98%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">2%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Electro-Welded wire mesh panel&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">100%</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 3pt; font-size: 9pt; text-align: center; padding-left: 3pt"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">&mdash;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Other&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">12%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">37%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">39%</P></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">3%</P></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">12%</P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">88&nbsp;%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">63%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">61%</P></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">97%</P></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid">88%</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; font-size: 9pt; text-indent: -0.1in"><FONT STYLE="font: 9pt Times New Roman, Times, Serif">Total (weighted average)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">56%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">60%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">62%</P></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">60%</P></TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 5.65pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">67%</P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">44%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">40%</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">38%</P></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">40%</P></TD>
    <TD STYLE="padding-right: 3pt; padding-left: 3pt">
        <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1.5pt double">33%</P></TD></TR>
<TR>
    <TD STYLE="width: 19%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: 3pt; padding-left: 3pt">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: 3pt; padding-left: 3pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in">During 2015, approximately 28% 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
72% of our sales by volume, with SBQ products representing approximately 25% 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 80% of our sales in the
United States and Canadian markets come from contractual long-term agreements that establish minimum quantities and prices, which
are adjustable based on fluctuations of prices of key production materials. The remainder of our sales in the United States and
Canadian markets are spot sales either directly to end customers through our sales force or through independent distributors. We
sell to customers in the United States and Canadian markets through a staff of professional sales representatives and sales technicians
located in the major manufacturing centers of the Midwest, Great Lakes and Southeast regions of the United States.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">During 2015 and 2014, we received orders
for our products in our Mexican facilities on average approximately two weeks before producing those products. We generally fill
orders for our U.S. and Canadian SBQ steel products within one to 12 weeks of the order depending on the product, customer needs
and other production requirements. Customer orders are generally cancelable without penalty prior to finishing size rolling and
depending on customers&rsquo; changing production schedules. Accordingly, we do not believe that backlog is a significant factor
in 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 Nissan North America, Inc.; first tier suppliers to automotive and industrial equipment manufacturers
such as American Axle &amp; Manufacturing Holdings, Inc., Meritor, Inc., Neexteer, NSK and Hephaesus Holding Inc.; service centers
which include AM Castle &amp; Co., Earle M. Jorgensen Co., and Eaton Steel Bar Company.</P>


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our plant in Brazil began production
in June 2015 with 30,000 tons produced and 4,000 tons shipped in 2015, all of which correspond to rebar. Our main objective is
to sell our products through independent distributors, targeting the construction market by providing quality service, a key factor
in attracting and retaining customers. Our major customers include: Jotacefer Distribuidora, Risatec Distribuidor, Marson Com Distr
de Aco, Fa Aco para Construccao y Fav Comercio de Ferro.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Brazil has recently experienced economic
recessions and is not projected to return to positive growth in annual terms until the second half of 2016. Notwithstanding, our
sales policy in Brazil has been well accepted by our customers and, even in the midst of a global crisis, our sales have begun
to increase steadily, opening us a place in the steel Market in Brazil.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026550"></A><A NAME="a_Toc322026108"></A>Competition</P>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We believe that our competitors&rsquo;
closest plants to the southern California market are: Nucor, Corporation, located in Plymouth, Utah; Commercial Metals Company,
located in Meza, Arizona; Thyssenkrupp Steel North America, Inc., located in Santa Fe Springs, California; Deacero, S.A. de C.V.
(&ldquo;Deacero&rdquo;), located in Saltillo, Coahuila, M&eacute;xico and Gerdau Corsa, S.A.P.I. de C.V.<SUP> </SUP><FONT STYLE="vertical-align: baseline">(&ldquo;</FONT>Gerdau
Corsa&rdquo;), located in Tijuana, Baja California,</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Mexico. We believe that we have an advantage over certain
competitors due to the labor cost in our Mexican operations.<SUP> </SUP></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2015, we sold approximately 214,014
tons of I-beams, channels and angles at least three inches in width which represented approximately 11% of our total finished product
sales for the year. In 2014, we sold approximately 176,415 tons of I-beams, channels and angles at least three inches in width
which represented approximately 8% of our total finished product sales for the year. We believe that the domestic competitors in
the Mexican market for structural steel are Gerdau Corsa, Deacero, and Sider&uacute;rgica del Golfo, S.A. de C.V. (a wholly-owned
subsidiary of Industrias CH). We estimate that our share of Mexican production of structural steel was 31.6% in 2015 and 29.5%
in 2014, 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 2015, we sold approximately 976,850
tons of hot rolled and cold finished steel bars and 1,125,970 tons in 2014. 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 14% and 28%, respectively,
in 2015 and 16% and 27%, respectively, in 2014. Rebar and light structural steel together accounted for approximately 692,548 tons,
or 34%, of our total production of finished steel products in Mexico and the United States in 2015. Rebar and light structural
steel together accounted for approximately 689,725 tons, or 31%, of our total production of finished steel products in Mexico and
the United States in 2014. We compete in the Mexican market with a number of producers of these products, including Deacero, Talleres
y Aceros, S.A., Grupo Acerero, S.A. de C.V., Nucor Corporation, ArcelorMittal Lazaro Cardenas, S.A. de C.V., Ternium Mexico, S.A.
de C.V. and Gerdau Corsa.</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, Corporation , ArcelorMittal
USA, LLC, Charter Steel, Inc., Steel Dynamics, Inc., The Timken Company and Gerdau Ameristeel US, Inc.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our main competitors in the Brazilian
market: Aperam, ArcelorMittal Brazil, CSN, Gerdau, Sinobras, Thyssenkrupp CSA; Usiminas, VSB tubes, V &amp; M do Brasil, Villares
Metals and Votorantim.</P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026551"></A><A NAME="a_Toc322026109"></A>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 9001:2008 certification from International Quality Certifications covering the period from March
12, 2016 to September 14, 2018. 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&rsquo;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 certified except for the Solon plant. Through these certification, Republic&rsquo;s Environmental, Health &amp; Safety
Management System is structured upon training, communication, employee participation, document control, objective and target setting,
and management&rsquo;s periodic reviews to implement our commitments to environmental protection and providing a safe and clean
workplace. Most of the automotive customers of our Republic facilities require ISO 14001 certification. The current ISO 14001 certification
is effective until November 2016.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026552"></A><A NAME="a_Toc322026110"></A>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 21% in 2011 and 1% in 2012,
decreased approximately 6% in 2013, increased approximately 7% in 2014 and decreased approximately 16% in 2015; and prices of ferroalloys
increased approximately 10% in 2011, decreased approximately 10% in 2012 and 5% in 2013, increased approximately 16% in 2014 and
decreased approximately 9% in 2015. 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 2015, our cost of sales in Mexico,
as a percentage of sales in Mexico, was 76%, compared to our U.S. operations where our cost of sales, as a percentage of sales
in the United States, was 125%, and our consolidated cost of sales, as a percentage of consolidated sales, was 95%. 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, 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 52% of our consolidated manufacturing conversion
cost in 2015 (63% of the manufacturing conversion cost in our Mexico operations and 36% of the manufacturing conversion cost in
our U.S. operations), compared to 55% of our consolidated manufacturing conversion cost in 2014 (64% of the manufacturing conversion
cost in our Mexico operations and 45% 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 13.3% and 15.2% of our refined scrap tonnage in 2015 and 2014, respectively, and
(ii) purchases from third party scrap processors in Mexico and the southwestern United States, which, in the aggregate, provided
us with approximately 78.5% and 8.2%, respectively, in 2015 and approximately 80.6% and 4.2%, respectively, in 2014 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 2014 and 2015, 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
13% of our manufacturing conversion cost in 2015, compared to 10% in 2014, and they accounted for 17% of our manufacturing conversion
cost in 2015, compared to 17% in 2014 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 Elmet, S.A. de C.V., Ferroatl&aacute;ntica de M&eacute;xico, S.A. de C.V. and
Marco Metales de Mexico, S. de R.L. de C.V. Our U.S. and Canadian facilities purchase most of their ferroalloys from Affival, Duferco
Steel, Globe Met., Gottlieb, Kennecott, Rusian Ferro, Traxys, Vale Americas, 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 Graftech Comercial de Mexico, S.A. de C.V. and Dama Trade, S.A. de C.V. Our U.S. and Canadian facilities purchase
most of their electrodes from SGL Carbon, Showa Denko Carbon, SK Carbon and Graftech International HLD Inc.</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 for our Mexican operations
from RHI Refmex, S.A. de C.V., Vesuvius de M&eacute;xico, S.A. de C.V., Magnesita Refractories M&eacute;xico, S.A. de C.V., Magna
Refractarios M&eacute;xico, S.A. de C.V. and Refratechnik. Our U.S. and Canadian facilities purchase most of their refractory products
from North American Refractories Co., RResco Products, Inc, Veitsch-Radex America, Inc - RHI, Vesuvius USA, Corp., Nock &amp; Son
Co.-Minteq, Magna Refractories Inc., Refractory Materials Intl., Altus Refractories, LLC, Thermatex Sales Corp., and Magnesita
Refractories Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Electricity</I>. In 2015 and 2014
electricity accounted for approximately 9% of our consolidated manufacturing conversion cost. Electricity accounted for 9% in 2015
of our manufacturing conversion cost and 11% in 2014 in our Mexico facilities and is supplied by the CFE. It accounted for 10%
in 2015 and 7% in 2014 of the</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">manufacturing conversion cost in our U.S. and Canadian operations
and is supplied by American Electric Power Company, Nipsco Industries, Inc., New York Power and Ohio Edison. We, like most high
volume users of electricity in Mexico, pay special rates to CFE for electricity. Energy prices in Mexico have historically been
very volatile and subject to dramatic price increases in short periods of time. In the late 1990s, the CFE began to charge for
electricity usage based on the time of use during the day and the season (summer or winter). As a result, we have modified our
production schedule in order to reduce electricity costs by limiting production during periods when peak rates are in effect. We
cannot assure that any future cost increases will not have a material adverse effect on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Natural Gas. </I>Natural gas (including
&ldquo;combustoleo&rdquo; which is an oil derivative that is less refined than gasoline and diesel fuel oil that can be used instead
of gasoline in our Mexicali plant) consisted of approximately 3% of our consolidated manufacturing conversion cost (2% of the manufacturing
conversion cost of our Mexican operations and 3% of the manufacturing conversion cost of our U.S. operations) in 2015 and 2014.
We use natural gas cash-flow exchange contracts or swaps where we receive a floating price and pay a fixed price to hedge our risk
of from fluctuations in natural gas prices. Fluctuations in natural gas prices from volume consumed are recognized as part of our
operating costs. As applicable, we recognized the fair value of instruments either as liabilities or assets. Such fair value and
thus, the value of these assets or liabilities were restated at each month&rsquo;s-end. As indicated in Note 4(t) to our consolidated
financial statements as of and for the year ended December 31, 2015, 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
and 2011, the fair value of derivatives that did not qualify for hedge accounting was adjusted through statement of income. At
December 31, 2015 and 2014 we did not have natural gas cash-flow exchange contracts or swaps. For the derivatives that qualified
for hedge accounting, their fair value was adjusted through the stockholders&rsquo; equity under the caption fair value of derivative
financial instruments until such time as the related item 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 &ldquo;Financial Instruments: Disclosures.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026553"></A><A NAME="a_Toc322026111"></A>Regulation</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026554"></A><A NAME="a_Toc322026112"></A>U.S.
and Canadian Operations</P>

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

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" 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>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">&#183;</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">&#183;</FONT></TD><TD>the release of petroleum products, hazardous substances, hazardous wastes, or toxic substances to the environment; 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>the investigation and remediation of contaminated soil, sediment and groundwater.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We monitor our compliance with these
laws and regulations through our environmental management system, and believe that we currently are in substantial compliance with
them, although we cannot assure you that we will at all times operate in compliance with all such laws and regulations. If we fail
to comply with these laws and regulations, we may be assessed fines or penalties or be subject to injunctive relief which could
have a material adverse effect on us.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our Lorain, Ohio plant (which is not
currently in operation) and our Canton, Ohio facility are subject to the Maximum Achievable Control Technology (&ldquo;MACT&rdquo;)
standard for Electric Arc Furnaces as an &ldquo;area source.&rdquo; Revisions of this standard are under development and, when
promulgated, may impose additional restrictions on our Lorain and 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 steelmaking operations in the United
States and in Mexico use electric arc furnaces where carbon dioxide generation is primarily linked to energy use. In the United
States, the federal environmental agency has issued rules imposing inventory and reporting obligations to which some of our facilities
are subject, and has also issued rules that will affect preconstruction permits for our facilities where increases in greenhouse
gas pollutants are contemplated. The U.S. Congress has debated various measures for regulating greenhouse gas emission (such as
carbon dioxide) and may enact them in the future. Such laws and regulations may also result in higher costs for coking coal, natural
gas and electricity generated by carbon-based systems (such as coal-fired electric generating facilities). Canada&rsquo;s federal
government is also considering various approaches for reducing greenhouse gas emissions, although we do not presently believe Republic&rsquo;s
Hamilton, Ontario facility would be significantly impacted by this efforts since it is not a steel-producing facility. Such future
laws and regulations, whether in the form of cap-and-trade emissions permit system, a carbon tax or other regulatory regime may
have a negative effect on our operations. Climate change policy is evolving at regional, national and international levels, and
political and economic events may significantly affect the scope and timing of climate change measures that are ultimately put
in place. As signatories to the UNFCCC, Mexico, the U.S. and Canada are subject to the Paris Agreement to fight climate change,
which was taken by the parties at the 21th session of the UNFCCC conference of the Parties in 2015. As a result, some of our significant
facilities may ultimately be subject to future regional, provincial and/or federal climate change regulations to manage greenhouse
emissions. More stringent greenhouse policies and regulations could adversely affect our business and results of operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In the United States, the federal environmental
agency is developing a new rule that is expected, among other things, to impose a timeline for the phasing out of polychlorinated
biphenyl (&ldquo;PCB&rdquo;) -containing fluid in equipment that we currently use at many of our U.S. facilities. A preliminary
notice regarding this future regulation will be published in 2016 for comments, and a formal proposed rule is expected within the
next two years. If the rule is enacted as proposed, it will require our facilities to reduce the levels of PCBs in our equipment
to less than 50 ppm within 5 years following its adoption, which will in turn require us to incur cost for the removal and disposal
of PCB containing oils, sampling and possible replacement of equipment in the event PCB levels cannot be reduced to acceptable
levels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Also in the United States, more stringent
ambient standards were adopted in 2010 for sulfur dioxide (SO2) and nitrogen oxide (NOx), and carbon monoxide (CO) in 2011. More
stringent standards for particulate matter have been promulgated in 2012. As these new more stringent standards are implemented
through the different state</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026555"></A><A NAME="a_Toc322026113"></A>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, among others, are: (i) the General Law of Ecological Balance and Environmental Protection (<I>Ley
General del Equilibrio Ecol&oacute;gico y la Protecci&oacute;n al Ambiente </I>or &ldquo;LGEEPA&rdquo;) and its regulations, which
are administered and overseen by the Ministry of the Environment and Natural Resources (<I>Secretar&iacute;a de Medio Ambiente
y Recursos Naturales </I>or &ldquo;SEMARNAT&rdquo;) and enforced by the Ministry&rsquo;s enforcement branch, the Federal Attorney&rsquo;s
Office for the Protection of the Environment (<I>Procuradur&iacute;a Federal de Protecci&oacute;n al Ambiente </I>or <I>&ldquo;</I>PROFEPA&rdquo;);
(ii) the General Law for the Prevention and Integral Management of Waste (<I>Ley General para la Prevenci&oacute;n y Gesti&oacute;n
Integral de los Residuos </I>or the &ldquo;Law on Wastes&rdquo;), which is also administered by SEMARNAT and enforced by PROFEPA;
(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; and (iv) the Federal Law on Environmental
Responsibility (<I>Ley Federal de Responsabilidad Ambiental</I>), which is also administered by SEMARNAT and enforced by PROFEPA.</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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">severally liable for the remediation of such contaminated
sites, irrespective of any recourse or other actions such owners and lessors may have against the contaminating party, and aside
from the criminal or administrative liability 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. Some of our facilities in Mexico have a 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&rsquo;s Ministry of Economy (<I>Secretar&iacute;a
de Econom&iacute;a</I>), through the General Rules Department (<I>Direcci&oacute;n General de Normas </I>or &ldquo;DGN&rdquo;),
promulgates regulations regarding many products that we manufacture. Specifically, pursuant to the Measurements Law (<I>Ley Federal
sobre Metrolog&iacute;a y Normalizaci&oacute;n</I>), the DGN issues specifications on the quality and safety standards for our
product lines. We believe that all of our products are in material compliance with all applicable DGN regulations.</P>

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

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

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

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

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

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

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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>Transpacific Partnership Trade Agreement
(TPP).</I> On February 4, 2016, Mexico, along with Australia, Brunei Darussalam, Canada, Chile, United States, Japan, Malaysia,
New Zealand, Peru, Singapore and Vietnam, signed the TPP, in the City of Auckland, New Zealand. This treaty will grant Mexican
products access to six markets (Australia, Brunei, Malaysia, New Zealand, Singapore and Vietnam) with approximately 155 million
of potential consumers, which were not covered by any other trade agreement. The TPP will become effective two years after its
signature, provided all 12 participating countries ratify the agreement, or when at least six countries representing at least 85%
of the gross domestic product of the TPP ratify the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The TPP eliminates or reduces tariff
and non-tariff barriers across substantially all trade in goods and services and covers the full spectrum of trade, including goods
and services trade and investment, so as to create new opportunities and benefits for the businesses, workers, and consumers of
the countries members.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The TPP facilitates the development of
production and supply chains, and seamless trade, enhancing efficiency and supporting our goal of creating and supporting jobs,
raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic
markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The TPP promotes innovation, productivity,
and competitiveness by addressing new issues, including the development of the digital economy, and the role of state-owned enterprises
in the global economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The TPP includes new elements that seek
to ensure that economies at all levels of development and businesses of all sizes can benefit from trade. It includes commitments
to help small- and medium-sized businesses understand the Agreement, take advantage of its opportunities, and bring their unique
challenges to the attention of the TPP governments. It also includes specific commitments on development and trade capacity building,
to ensure that all Parties are able to meet the commitments in the Agreement and take full advantage of its benefits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The TPP is intended as a platform for
regional economic integration and designed to include additional economies across the Asia-Pacific region.</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On September 11, 2013, the United States
International Trade Commission (USITC) started an official anti-dumping investigation against rebar exports from Mexico and Turkey
promoted by Nucor, Gerdau, Commercial Metals, and Cascade Steel Buyer.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; color: #222222"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font-size: 10pt">On September 25, 2013, the USITC determined that there was sufficient evidence of &quot;injury&quot;
therefore, on October 2, 2013, the Department of Commerce (DOC) started the antidumping investigation.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; color: #222222"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font-size: 10pt">On November 21, 2013, DeAcero was named a &quot;Mandatory Respondent&quot; of the questionnaires
and on February 12, 2014, we were named the second &quot;Mandatory Respondent&quot; thereby replacing Grupo Acerero, S.A. de C.V.
which is not participating in the process.</FONT></TD></TR></TABLE>


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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; color: #222222"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font-size: 10pt">On April 21, 2014, preliminary &quot;dumping&quot; quotas were published: 66.7 % to Grupo Acerero,
S.A. de C.V., 10.66 % to us and 20.59% to other Mexican exporters (including DeAcero).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt; color: #222222"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font-size: 10pt">On October 14, 2014, the United States International Trade Commission (USITC) determined that
a U.S. industry is materially injured by reason of imports of steel concrete reinforcing bar from Mexico that are sold in the United
States at less than fair value and from Turkey that are subsidized by the government of Turkey. As a result of the USITC's affirmative
determinations, the U.S. Department of Commerce will issue an antidumping duty order on imports of this product from Mexico and
a countervailing duty order on imports of this product from Turkey. The U.S. government imposed tariffs of 66.7% against imports
for rebar from Deacero and us and tariffs of 20.58% for rebar from all other imports from producers in Mexico. On November 16,
2016, we filed a request for review with the U.S. Department of Commerce against the imposed tariffs. We expect the resolution
to this administrative proceeding will be rendered in September or October, 2016 and the new tariff quota to be effective six months
after its determination.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On August 14, 2013, the Ministry of Industry
and Tourism of Colombia (MIT) started an official safeguard investigation against imports of commercial angles and plates originating
from countries that are members of the World Trade Organization (WTO) at the request of DIACO-GERDAU and SIDOC, seeking the imposition
of a countervailing duty of 35%.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt; color: #222222"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.3pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font-size: 10pt">We were the only Mexican producer that responded to the questionnaire in October 10, 2013.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt; color: #222222"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.3pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font-size: 10pt">On April 2, 2014, the MIT announcement at a press conference that they would not impose safeguard
measures to rebar straight and roll nor to profiles of steel angles, square bars / slabs / plates. Only wire was subject to safeguard
measures with an antidumping duty of 21.29%. </FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We produce according to the technical
specifications of the Brazilian standard ABNT NBR 7480:2007 for steel bars and wires designed for the reinforcement for concrete
structures. Our products are also registered with the Brazilian National Institute of Metrology, Quality and Technology (INMETRO),
in accordance with Resolution CONMETRO No. 05, dated May 6, 2008, and comply with conformity assessment regulations, including
Ordinance No. 73, dated March 17, 2010, and with compulsory product certification regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have received environmental permits
from the Sao Paulo State, for which hydrological studies and feasibility of groundwater have been conducted, such permits include
a license granted by the Ministry of Environment of Sao Paulo and an operations license granted by the Ministry of Environment
CETESBE Sao Paulo State Comnahia.</P>


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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc322026556"></A><A NAME="a_Toc322026114"></A><FONT STYLE="color: #010000">C.</FONT></TD><TD>Organizational Structure</TD></TR></TABLE>

<P STYLE="margin: 0 0 0 22pt">The chart below sets forth a summary of our corporate structure.</P>

<P STYLE="margin: 0 0 0 22pt">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><IMG SRC="image_001.jpg" ALT="" STYLE="width: 700px">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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%); Industrias del Acero y del Alambre, S.A. de C.V.
(99.99%); Procesadora Mexicali, S.A. de C.V. (99.99%); Servicios Simec, S.A. de C.V. (100%); Sistemas de Transporte de Baja California,
S.A. de C.V. (100%); Operadora de Metales, S.A. de C.V. (100%); Operadora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de
C.V. (100%); Administradora de Servicios Sider&uacute;rgicos de Tlaxcala, S.A. de C.V. (100%); Operadora de Servicios de la Industria
Sider&uacute;rgica ICH, S.A. de C.V. (100%); Arrendadora Simec S.A. de C.V. (100%); CSG Comercial, S.A. de C.V. (99.95%); 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%), Simec International 8, Inc., (99.99%),
Simec International 9, S.A.P.I. de C.V., (100.00%); Corporaci&oacute;n ASL, S.A. de C.V. (99.99%); Sider&uacute;rgica del Occidente
y Pac&iacute;fico, S.A. de C.V. (100%) (incorporated in 2014); GS steel B.V. (100%) (incorporated in 2014); Aceros Especiales Sider&uacute;rgicos
de Tlaxcala, S.A. de C.V. (100%) (incorporated in 2015) and Recursos Humanos de la Industria Sider&uacute;rgica de Tlaxcala, S.A.
de C.V. (100%) (incorporated in 2015).</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). These facilities are operated by RRLC, S.A.P.I. de C.V. (95.10%)
(incorporated in 2015) and Grupo Chant, S.A.P.I. de C.V. (97.61%) (incorporated in 2015), since April, 2015 and October 2015, respectively.</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"></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, Aceros DM, S.A. de C.V.
(99.99%) Acero Transportes SAN, S.A. de C.V. (99.99%), Steel Promotor, Inc. (100%), Coadm Steel Inc. (100%), Aceros San Luis, S.A.
de C.V. (99.99%), Malla San 1, S.A. de C.V. (99.98%) and Malla San 2, S.A. de C.V. (99.98%).</TD></TR></TABLE>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">The following table identifies each of our significant operating
subsidiaries, including its country of incorporation and our percentage ownership thereof at December 31, 2015:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 68%; padding-right: 5.4pt; padding-left: 0">
        <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: 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>Country
        of Incorporation</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>Ownership
        Interest (%)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pacific Steel, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec International 9, S.A.P.I. de C. V. </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec USA, Corp.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Simec Steel, Inc.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><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; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sider&uacute;rgica del Occidente y Pac&iacute;fico, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gs Steel BV</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Netherlands</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">RRLC S.A.P.I. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">95.10%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Grupo Chant S.A.P.I. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">97.61%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Aceros Especiales Sider&uacute;rgicos de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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: 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Recursos Humanos de la Industr&iacute;a Sider&uacute;rgica de Tlaxcala, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">100.00%</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; text-indent: 0.5in">The U.S. dollar is the functional currency of
our U.S. subsidiaries, except Simec 8 International, Inc., Steel Promotor, Inc. and Coadm Steel, Inc., which are not listed above
and whose functional currency is the peso. These entities were merged into Simec USA Corp at the beginning of 2015 and, therefore,
are no longer in operations. Prior to the merger, these entities recorded uncollected accrued interest for the year ended December
31, 2014 and their main assets and liabilities were accounts receivable and payable to related parties denominated in pesos. These
three subsidiaries were previously Mexican entities and in 2014 changed their tax residence to the United States. Prior to the
merger but after changing their tax residence to the United States, these entities had minimal operations and, therefore, we considered
that their functional currency was the Mexican peso. In 2013, these subsidiaries operated in Mexico and were treated as Mexican
subsidiaries.</P>


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<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 fifteen
facilities throughout North America. At December 31, 2015, our crude steel production capacity was 4.6 million tons, of which 1.2
million tons were based on an integrated blast furnace technology, and 3.4 million were based on electric arc furnace, or mini-mill,
technology. Our Mexican facilities have 2 million tons of crude steel production capacity, operating five mini-mill facilities.
Our U.S. operations have 2.1 million tons of crude steel production capacity and our Brazil operations have 0.5 million tons of
crude steel production capacity. In addition, we have 4.3 million tons of rolling and finishing capacity, of which 1.8 million
are located in Mexico, 2 million are located in the United States and Canada and 0.5 million are located in Brazil.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We operate seven mini-mills, five in
Mexico, one in the United States and one in Brazil. 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. Our mini-mill in Brazil is located in Pindamonhangaba; S&atilde;o Paulo. We also own an integrated blast furnace
and an electric arc 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>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 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"><A NAME="a_Toc322026557"></A><A NAME="a_Toc322026115"></A>Production
Volume and Capacity Utilization</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; 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</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; 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>2013</B></P></TD>
    <TD STYLE="vertical-align: top; width: 10%; 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>2014</B></P></TD>
    <TD STYLE="vertical-align: top; width: 10%; 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>2015</B></P></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif; margin-bottom: 12pt">
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(tons in thousands)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><B>Melt shops</B></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">Steel billet production&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,495.0</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,562.4</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,289.5</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,483.7</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,318.0</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">Annual installed capacity<SUP>(1)</SUP>&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">4,797.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">4,797.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">4,500.0</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">4,207.9</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">4,552.9</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">Effective capacity utilization&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">52.0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">53.4%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">50.9%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">59.0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">50.9%</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><B>Rolling mills</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">Total production&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,440.4</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,462.4</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,300.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,286.3</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">2,206.4</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">Annual installed capacity<SUP>(1)</SUP>&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">3,757.8</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">3,790.5</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">3,817.6</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">3,829.6</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">4,279.6</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in">Effective capacity utilization&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">64.9%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">65.0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">60.3%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">59.7%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">51.6%</TD></TR>
</TABLE>
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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Annual installed capacity is determined based on the assumption that billet of various specified diameters, width and length
is produced at the melt shops or that a specified mix of rolled products are produced in the rolling mills on a continuous basis
throughout the year except for periods during which operations are discontinued for routine maintenance, repairs and improvements.
Amounts presented represent annual installed capacity as of December 31 for each year.</TD></TR></TABLE>

<P STYLE="font: 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 2015.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt; text-align: center">Mexican Production per Facility
by Product<BR>
<A NAME="a_Toc322026558"></A><A NAME="a_Toc322026116"></A>Location</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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 STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">I Beams&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">21.5%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.7%</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: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.1%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.8%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.4%</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">Angles&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">31.3%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">30.3%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.5%</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">Hot rolled bars (round, square And hexagonal rods)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.2%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">43.2%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17.3%</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: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.2%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">43.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">89.7%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">39.5%</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">Flat bars&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24.2%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.7%</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">Cold finished bars&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.9%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">32.6%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.5%</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">Electro-Welded wire mesh&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Wire rod&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.7%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.3%</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: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.4%</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.6%</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: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0%</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid">0%</P></TD></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">Total&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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; font-size: 10pt; 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 furnaces and three rolling mills. The Guadalajara mini-mill has an annual installed capacity of 370,000
tons of billet and an annual installed capacity of finished product of 480,000 tons. In 2015, the Guadalajara mini-mill produced
367,982 tons of steel billet and 366,073 tons of finished product, operating at 99% capacity for billet production and 76% 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>


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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif; margin-bottom: 12pt">
<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="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; 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</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; 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>2013</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; 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>2014</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; 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>2015</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Steel sales (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">383</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">353</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">323</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">335</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">369</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">Average finished product price per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps. 10,809</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;11,357</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,929</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;10,410</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,726</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Average scrap cost per ton&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,983</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,372</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,775</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,934</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,539</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">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,143</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,070</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,879</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,613</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,399</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">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,707</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,749</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,685</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,586</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,489</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>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: 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 2015, the Mexicali mini-mill produced approximately
247,153 tons of billet, of which the Guadalajara mini-mill used 22,327 tons. In 2015, the Mexicali mini-mill produced 202,434 tons
of finished products. In 2015 we operated the Mexicali mini-mill at 57% capacity for billet production and at 81% 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 2015, 44% of the products produced
at the Mexicali mini-mill were rebar, 30% were angles, 5% were hot rolled bars (round, square and hexagonal rods) and the remaining
21% were channels and flat bar.</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 62%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif; margin-bottom: 12pt">
<TR>
    <TD STYLE="vertical-align: bottom; width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; 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</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; 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>2013</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; 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>2014</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; 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>2015</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Steel sales (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">180</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">186</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">195</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">206</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">220</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">Average finished product price per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;10,072</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;10,527</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,097</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,170</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,405</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">Average scrap cost per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,028</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,283</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,580</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,348</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,981</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">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,564</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,765</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,643</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,659</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,414</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">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,700</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,895</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,819</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,752</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,608</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>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>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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 492,000 tons. In 2015, the Apizaco mini-mill produced 413,633 tons of steel billet. In 2015, the
Apizaco mini-mill produced 357,779 tons of finished products. In 2015, we operated the Apizaco mini-mill at 81% capacity for billet
production and at 73% 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 120,000 tons. In 2015, the Cholula facility produced 105,949 tons of finished products, at 88%
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 2015, 43% of the products we produced
at the Apizaco and Cholula facilities were hot rolled bars (round, square and hexagonals), 24% were flat merchant bar and 33% were
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 CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; 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</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; 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>2013</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; 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>2014</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; 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>2015</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Steel sales (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">343</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">376</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">329</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">361</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">339</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">Average finished product price per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;11,942</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;12,479</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;11,845</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;12,047</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;12,366</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">Average scrap cost per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,725</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,037</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,498</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,800</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,111</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">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,360</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,135</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,239</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,400</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,455</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">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,090</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,033</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,084</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,154</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,195</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD></TR>
</TABLE>
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 6in 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>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>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, 2015,
these facilities had an annual installed capacity of 660,000 tons of billet and 600,000 tons of finished product. In 2015, the
San Luis facilities produced 585,056 tons of steel billet. In 2015, the San Luis facilities produced 559,203 tons of finished product,
operating at 89% capacity for billet production and 93% capacity for finished product production. Our San Luis facilities mainly
produces rebar, light structurals and wire rod. In 2015, 90% of the products produced at the San Luis facilities were rebar, 9%
were e<FONT STYLE="font-family: Times New Roman, Times, Serif">lectro-welded wire mesh,</FONT> wire rod and e<FONT STYLE="font-family: Times New Roman, Times, Serif">lectro-welded
wire mesh panel</FONT>, and the remaining 1% were other light structurals.</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 CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</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"><B>2011</B></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"><B>2012</B></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"><B>2013</B></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"><B>2014</B></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"><B>2015</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Steel sales (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">503</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">560</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">528</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">517</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">524</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">Average finished product price per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;10,133</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;10,438</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,309</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,269</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;9,786</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">Average scrap cost per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,935</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,434</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,818</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,936</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,462</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">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,166</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,390</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,594</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,268</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,060</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">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,630</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,604</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,750</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,764</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,584</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD></TR>
</TABLE>
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 6in 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>Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss.</TD></TR></TABLE>


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<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, 2015, these facilities
had an annual installed capacity of 2,083,000 tons of billet and 2,008,000 tons of finished product. In 2015, Republic facilities
produced 650,735 tons of steel billet. For the same period, Republic facilities produced 498,597 tons of hot-rolled bars. Republic
facilities produced 79,199 tons of cold finish bars. In 2015, Republic facilities produced 112,765 tons of wire 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 selected operating data for our Republic facilities.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 6pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>2011</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 6pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>2012</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 6pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>2013</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 6pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>2014</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 6pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>2015</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Steel sales (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">880</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">787</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">689</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">778</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">570</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">Average finished product price per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;16,050</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;16,544</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;15,350</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;15,823</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;16,611</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">Average scrap cost per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,678</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,212</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,650</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,354</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,899</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">Average manufacturing conversion cost per ton of finished product<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,367</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,787</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,048</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,417</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,042</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">Average manufacturing conversion cost per ton of billet<SUP>(1)</SUP>&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,835</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,016</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,935</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,665</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,481</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD></TR>
</TABLE>
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 6in 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>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, a 150-ton electric arc furnace, 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, 2015, an annual installed capacity of 952,000 tons of steel billet and 816,000 tons of finished product. This facility produced
86,275 tons of steel billets in 2015 and was operated at 9% capacity of steel billet. During 2015, the Lorain facility operated
at 12% of capacity for 9-10&rdquo; rolling mill and 22% of capacity for 20&rdquo; mill finishing and shipping production, and it
produced 134,810 tons of finished products.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Canton produces blooms and billets for
the three rolling mills in Republic facilities and for trade customers. We use the QVL inspection line to inspect finished bar
produced in Lackawanna and Lorain. As of December 2015, the Canton facility had annual installed capacity of 1,131,000 tons of
steel billet. In 2015, this facility produced 564,460 tons of blooms, billets and other semi-finished trade product and was operated
at 50% 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 0.750&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, 2015, the Lackawanna facility had annual installed capacity
of 653,000 tons of hot rolled bars. In 2015, this facility produced 363,787 tons of hot rolled bars and was operated at 56% capacity
of finished product.</P>


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<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, 2015, an annual installed
capacity of 125,000 tons of finished product. During 2015, the Massillon facility was operated at 29% capacity of finished product
and produced 35,744 tons of cold finished bars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Gary, Indiana</I>. Our Gary facility
mainly produces SBQ steel and has a cold finishing facility which includes the machinery and equipment to clean, draw, turn, chamfer,
anneal, grind, straighten and saw bars. As of December 31, 2015, the Gary facility had annual installed capacity of 71,000 tons
of cold finished bars. In 2015, this facility produced 6,260 tons of cold finished bars and was operated at 9% 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, 2015, the Solon and Memphis facilities had installed capacities of 196,000, and 87,000 tons, respectively, for wire
products. During 2015, the Solon facility produced and shipped 112,765 tons of wire products and was operated at 58% capacity of
finished product.&nbsp; No wire products were produced at the Memphis facility during 2015.</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, 2015, the Hamilton facility had annual installed
capacity of 59,000 tons of cold finished bars. In 2015, this facility produced 37,195 tons of cold finished bars and was operated
at 63% capacity of finished product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in"><I>Pindamonhangaba, Sao Paulo, Brazil.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our plant is located 140 kms from the
city of Sao Paulo, in a town called Pindamonhangaba, State of Sao Paulo and is 218 miles from Rio de Janeiro. Our Brazil facility
and equipment include an electric German arc furnace and an Italian rebar and wire rod rolling mill. This plant began operations
in July 2015 and currently produces rod. As of December 31, 2015, this plant had installed capacity to produce 500,000 tons of
&quot;billet&quot; and 450,000 tons of finished product per year capacity. In 2015 our mini-steel plant in Brazil produced 53,449
tons of &quot;billet&quot; and 30,342 tons of finished product, operating at 11% of its capacity for &quot;billet&quot; and 6%
capacity for finished product.</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
period indicated selected operating data for our Brazil facility.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 78%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 22%; 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, 2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Steel sales (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="padding-right: 27.8pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Average finished product price per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 27.8pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ps.&nbsp;&nbsp;7,500</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Average scrap cost per ton&#9;</FONT></TD>
    <TD STYLE="padding-right: 27.8pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,322</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 0.1in; font-size: 10pt; text-indent: -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 STYLE="padding-right: 27.8pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,481</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 0.1in; font-size: 10pt; text-indent: -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 STYLE="padding-right: 27.8pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,103</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -5.4pt; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in">&nbsp;</TD>
    <TD STYLE="padding-right: 27.8pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&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>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 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%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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>2015 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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Structurals (45%); Light structurals (18%); SBQ (5%); Bars 30%, Rebar (2%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">366,073</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mexicali</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Structurals (22%); Rebar (44%); Light structurals (22%), hot rolled bars (12%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">202,434</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">357,779</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">492,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar (85%), Light structurals (2%), Wire rod (1%), Electro-Welded wire mesh (6%), Electro-Welded wire mesh panel (6%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">389,999</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">169,204</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">200,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lorain<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace, 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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">134,810</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">816,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Canton<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">564,460</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,131,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lackawanna</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">363,787</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">653,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Massillon</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">35,744</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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>2015 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-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gary</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,260</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; 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; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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-size: 10pt"><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-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">112,765</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">283,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hamilton</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">SBQ (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><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; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">37,195</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">59,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Rebar (100%)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">electric arc furnace, rebar and wire rod rolling mill</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">30,342</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">450,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&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: 0"><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><B> </B></TD></TR></TABLE>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc462142417"></A><A NAME="a_Toc323315309"></A><A NAME="a_Toc323310713"></A><A NAME="a_Toc323254051"></A><A NAME="a_Toc323253660"></A><A NAME="a_Toc323247036"></A><A NAME="a_Toc323246758"></A><A NAME="a_Toc322026559"></A><A NAME="p48"></A>Item
4A.&#9;Unresolved Staff Comments</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc462142418"></A><A NAME="a_Toc323315310"></A><A NAME="a_Toc323310714"></A><A NAME="a_Toc323254052"></A><A NAME="a_Toc323253661"></A><A NAME="a_Toc323253337"></A><A NAME="a_Toc323247037"></A><A NAME="a_Toc323246759"></A><A NAME="a_Toc322026560"></A><A NAME="p48a"></A><FONT STYLE="color: #010000">Item&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000">5.<FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Operating
and Financial Review and Prospects</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The following discussion is derived from
our audited 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">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 was 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. 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.</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: 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" 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: 14.05pt"><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"><A NAME="a_Toc322026561"></A><A NAME="a_Toc322026119"></A><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"><A NAME="a_Toc322026562"></A><A NAME="a_Toc322026120"></A>Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are producers of SBQ and structural
steel products. Accordingly, our net sales and profitability are highly dependent on market conditions in the steel industry which
is greatly influenced by general economic conditions in North America and globally. The sharp reduction in economic activity and
consumer demand in general, and in the automotive, construction and manufacturing industries in particular, in North America starting
in the fourth quarter of 2008 has had a significant negative impact on the demand and price levels for all steel products, including
SBQ and structural steel products. These economic conditions have had an impact on all parts of our operations since the fourth
quarter of 2008. Our sales dropped in 2009 by 37% in the automotive sector and by 21% in the energy sector relative to 2008. Demand,
production levels and prices in certain segments and markets have recovered and stabilized to a certain degree, although the extent,
timing and duration of the recovery and potential return to pre-crisis levels remains uncertain. Our sales increased in 2010, 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%. Our net revenue from sales decreased in 2013, compared
to 2012, decreased by 23% in the automotive sector, decreased 15% in the independent distributor sector, decreased 33% in the hand
tools sector, increased 3% in the mining sector and decreased 13% in other industries. The total decrease in net revenue from sales
of SBQ products in 2013, compared to 2012, was 18%. Our net revenue from sales increased in 2014, compared to 2013, increased by
42% in the automotive sector, decreased 13% in the independent distributor sector, decreased 34% in the hand tools sector, decreased
61% in the mining sector and increased 29% in other industries. The total increase in net revenue from sales of SBQ products in
2014, compared to 2013, was 18%. Our net revenue from sales decreased in 2015, compared to 2014, increased by 20% in the automotive
sector, decreased 43% in the independent distributor sector, increased 204% in the hand tools sector,</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">decreased 52% in the mining sector and decreased 48% in other
industries. The total decrease in net revenue from sales of SBQ products in 2015, compared to 2014, was 16%.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We focus on controlling our cost of sales
as well as our selling, general and administrative expenses. Our cost of sales largely consist of the costs of acquiring the raw
materials necessary to manufacture steel, primarily scrap metal and iron ore. Market supply and demand generally determine scrap
and iron ore prices, and, as a result, we have limited ability to influence their cost or the costs of other raw materials, including
energy costs; however, in 2011, 2012, 2013, 2014 and 2015 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 these periods. 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.<FONT STYLE="font-size: 11.5pt">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The negative operating trends in our
USA segment are primarily driven by declining demand that severely impacts production volume and therefore cost. The automotive
sector is stable and continues to provide good demand for our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our U.S. subsidiaries have entered into
sale agreements with customers and, in order to comply with the terms thereof, any existing orders pursuant to those agreements
need to be fulfilled even if the price of raw material increases with time. As the existing sale agreements expire, we will evaluate
new agreements which would result in a production of profitable products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Typically, about 80% of our business
uses a fixed base price that is negotiated annually, plus monthly scrap and alloy surcharges. The remaining 20% is transaction
business, where we can adjust the base pricing as required. The current deflationary environment in scrap metal and commodities,
while helping to lower our raw material costs also dampens our ability to secure better prices in the marketplace and our efforts
are single-mindedly focused on managing our costs down to secure levels of profitability without compromising in any way on quality.
Financial resources will continue to be made available as our U.S. segment tackles the cost curve and restores the business to
profitability. We and our principal shareholder are committed to continue the support to our USA segment and we expect it to become
a profitable segment again in the near future.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></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 - 2015</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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="5" 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="width: 45%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 11%; 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"><B>2011</B></P></TD>
    <TD STYLE="width: 11%; 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"><B>2012</B></P></TD>
    <TD STYLE="width: 11%; 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"><B>2013</B></P></TD>
    <TD STYLE="width: 11%; 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"><B>2014</B></P></TD>
    <TD STYLE="width: 11%; 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"><B>2015</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Shipments (thousands of tons)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,289</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,262</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,064</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,197</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,026</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara and Mexicali&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">563</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">539</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">518</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">540</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">589</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Apizaco and Cholula&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">343</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">376</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">329</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">362</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">339</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">San Luis facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">503</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">560</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">528</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">517</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">524</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Republic facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">880</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">787</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">689</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">778</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">570</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&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 sales (Ps. millions)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">29,270</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">29,524</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,369</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">26,829</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,476</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara and Mexicali&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,953</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,967</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,981</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,366</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,658</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Apizaco and Cholula&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,096</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,692</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,897</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,361</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,192</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">San Luis facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,097</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,845</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,915</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,792</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,128</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Republic facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,124</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,020</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,576</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,310</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,468</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">30</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&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">Cost of sales (Ps. millions)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25,563</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25,960</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">22,410</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25,492</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">23,097</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara and Mexicali&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,866</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,116</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,087</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,740</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,955</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Apizaco and Cholula&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,067</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,344</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,729</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,115</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,764</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">San Luis facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,005</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,568</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,240</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,221</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,529</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Republic facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,625</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,932</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,354</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,416</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,829</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&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">Average price per ton (Ps.)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,787</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,052</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,807</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,212</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,081</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara and Mexicali&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,574</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,071</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,616</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,937</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,606</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Apizaco and Cholula&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,942</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,479</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,845</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,047</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,366</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">San Luis facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,133</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,438</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,309</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,269</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,786</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Republic facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,050</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,544</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15,350</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15,823</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,611</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,500</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">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right">&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">Average cost per ton (Ps.)&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,168</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,477</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,858</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,603</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,400</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Guadalajara and Mexicali&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,643</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,492</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,890</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,778</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,715</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Apizaco and Cholula&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,942</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,894</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,295</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,605</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,153</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">San Luis facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,962</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,157</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,030</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,164</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,643</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Republic facilities&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15,483</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,432</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,479</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17,244</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20,753</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; font-size: 10pt; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Brazil</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,000</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">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>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 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
2.5% in 2015 and increased 2.3% in 2014. The U.S. GDP increased 2.4% in 2015 and 2014. Deterioration in economic conditions in
the countries in which we operate is likely to adversely affect our results of operation.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">This period of high prices for steel
encouraged reactivation of investment in production capacity, and consequently an increase in the supply of steel products that
contributed to a decline in steel prices. As the 2008 financial crisis worsened in late 2008 and early 2009, global demand for
steel fell while new steel production capacity was coming into the market, and as a result steel prices fell worldwide. In 2009
the average steel price decreased approximately 22% compared to 2008. Due to an increase in the demand, in 2010, the average steel
price increased approximately 16% 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. The average steel price decreased approximately 10%
in 2013 compared to 2012. The average steel price increased approximately 3% in 2014 compared to 2013. The average steel price
decreased approximately 23% in 2015 compared to 2014, mainly due to the deceleration in China.</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. In 2013, imports to Mexico decreased
as domestic and global market conditions worsened. In 2014, imports to Mexico increased slightly. In 2015, imports to Mexico increased
10% compared to 2014 according to preliminary information of CANACERO.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Steel imports to the United States accounted
for an estimated 33% of the domestic U.S. steel market in 2015 and an estimated 28% in 2014. Foreign producers typically have lower
labor costs, and in some cases are owned, controlled or subsidized by their governments, allowing production and pricing decisions
to be influenced by political and economic policy considerations as well as prevailing market conditions. Increases in future levels
of imported steel in the United States could reduce future market prices and demand levels for steel in the United States. To this
extent, the U.S. Department of Commerce and the U.S. International Trade Commission are currently conducting five year &ldquo;sunset&rdquo;
reviews of existing trade relief in several different steel products. Imports represent less of a threat to SBQ producers like
us in the United States than to commodity steel producers because of the high quality requirements and standard required by buyers
of SBQ steel products.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We purchase substantial quantities of
raw materials, including scrap metal, iron ore, coke and ferroalloys for use in the production of our steel products. The availability
and price of these inputs vary according to general market and economic conditions and thus are influenced by industry cycles.
As a result of the 2008 financial crisis that continues to affect the international markets, the prices of these inputs have remained
highly volatile. For example, prices of scrap metal increased approximately 34% in 2010, increased approximately 21% in 2011, increased
approximately 1% in 2012, decreased approximately 6% in 2013, increased approximately 7% in 2014 and decreased approximately 16%
in 2015; and prices of ferroalloys increased approximately 22% in 2010 and 10% in 2011, decreased approximately 10% and 5% in 2012
and 2013, respectively, increased approximately 16% in 2014 and decreased approximately 9% in 2015. As with other raw materials,
iron ore and coke prices fluctuate significantly. However, in 2010, 2011, 2012, 2013, 2014 and 2015 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, 3% in 2012, 9% in 2013, 7% in 2014 and
decreased approximately 12% in 2015; and prices for natural gas decreased approximately 18% in 2010, 14% in 2011, 32% in 2012,
increased approximately 16% in 2013 and 7% in 2014 and decreased approximately 23% in 2015.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Mexico has historically experienced high
annual rates of inflation. The annual rate of inflation, as measured by changes in the Mexican national consumer price index (<I>&Iacute;ndice
Nacional de Precios al Consumidor</I>) published by the Mexican Central Bank (Banco de Mexico) was 3.8% for 2011, 3.6% for 2012,
4.0% for 2013, 4.1% for 2014 and 2.1% for 2015. 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 (<I>Banco de Mexico</I>), during
this period the exchange rate registered a low of Ps. 9.92 per U.S.$1.00 at August 6, 2008, and a high of Ps. 17.36 per U.S.$1.00
at December 14, 2015. Depreciation of the Mexican peso relative to the U.S. dollar in 2015 was 17.7%. The exchange rate at December
31, 2015 was 17.3398 compared to 14.7348 at December 31, 2014. At September 15<FONT STYLE="background-color: white">,</FONT> 2016
the exchange rate was Ps.19.1520 per 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 convert Mexican pesos
into U.S. dollars and other currencies. While</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026563"></A><A NAME="a_Toc322026121"></A>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 &ldquo;Operating Segments&rdquo;: 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 three 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: 35.3pt"></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;;</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: 35.3pt"></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 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: 35.3pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>our Brazil segment represents the results of our operations in one plant located in Pindamonhangaba, S&atilde;o Paulo State,
Brazil, which started operations in June 2015.</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 CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<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="5" 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>For the
        year ended December 31, 2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD 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"><B>Mexico</B></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"><B>United States</B></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"><B>Brazil</B></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"><B>Operations
        between Segments</B></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"><B>Total</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(in thousands of pesos)</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">Net sales&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,978,728</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,467,604</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">29,489</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,475,821</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">Cost of sales&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,247,661</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,828,885</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20,421</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">23,096,967</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">Impairment of property, plant and equipment&#9;</FONT></TD>
    <TD STYLE="background-color: white; 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">&mdash;</P></TD>
    <TD STYLE="background-color: white; 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">2,071,901</P></TD>
    <TD STYLE="background-color: white; 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">&mdash;</P></TD>
    <TD STYLE="background-color: white; 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">&mdash;</P></TD>
    <TD STYLE="background-color: white; 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">2,071,901</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">Gross profit (loss)&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,731,067</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(4,433,182)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,068</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(693,047)</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">Administrative expenses&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,100,622</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">457,435</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,432</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,582,489</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 (income) expense, net&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(5,656)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(184,039)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,268</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(173,427)</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&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">33,872</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">155</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">34,027</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&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,987</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">47,032</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,805</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(41,629)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">40,195</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">Exchange gain (loss), net&#9;</FONT></TD>
    <TD STYLE="background-color: white; 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">840,156</P></TD>
    <TD STYLE="background-color: white; 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">&mdash;</P></TD>
    <TD STYLE="background-color: white; 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">(496,906)</P></TD>
    <TD STYLE="background-color: white; 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">(725,312)</P></TD>
    <TD STYLE="background-color: white; 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">(382,062)</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">Income (loss) before income tax&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,500,142</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(4,753,455)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(553,343)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(683,683)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,490,339)</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&#9;</FONT></TD>
    <TD STYLE="background-color: white; 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">1,412,695</P></TD>
    <TD STYLE="background-color: white; 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">(642,123)</P></TD>
    <TD STYLE="background-color: white; 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">&mdash;</P></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; 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">770,572</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">Net income (loss)&#9;</FONT></TD>
    <TD STYLE="background-color: white; 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 1.5pt double">2,087,447</P></TD>
    <TD STYLE="background-color: white; 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 1.5pt double">(4,111,332)</P></TD>
    <TD STYLE="background-color: white; 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 1.5pt double">(553,343)</P></TD>
    <TD STYLE="background-color: white; 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 1.5pt double">(683,683)</P></TD>
    <TD STYLE="background-color: white; 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 1.5pt double">(3,260,911)</P></TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; padding-right: 0.15in; padding-left: 0.1in; font-size: 10pt; text-indent: -0.1in; padding-top: 12pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Other Data</B></FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 12pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>Mexico</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 12pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>United States</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 12pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>Brazil</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 12pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>Operations
        between Segments</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 12pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; border-bottom: Black 0.5pt solid"><B>Total</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depreciation and amortization&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">747,436</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">512,393</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,264</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,261,093</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">Total assets&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">28,530,321</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,891,964</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,226,150</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(7,404,019)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">32,244,416</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">Total liabilities&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,889,025</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,808,505</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,829,524</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(7,404,019)</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,123,035</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">Additions of property, plant and equipment, net&#9;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">574,211</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">396</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">73,136</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">647,743</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">&nbsp;</P>


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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: center"><B>For
        the year ended December 31, 2014</B></P></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <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"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Mexico</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>United
        States</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Brazil</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Operations
        between Segments</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Total</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Net sales&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">14,518,299</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">12,310,462</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">26,828,761</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Cost of sales&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">12,075,965</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">13,416,333</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">25,492,298</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Gross profit&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,442,334</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(1,105,871)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,336,463</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Administrative expenses&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">818,213</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">335,127</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">40,378</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,193,718</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Other income, net&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(29,622)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(30,932)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(60,554)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Interest income&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">24,773</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">366</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">25,139</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Interest expense&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">7,164</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">25,028</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">15,296</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(24,874)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">22,614</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Exchange gain (loss), net&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">490,729</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">(202,502)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">185,865</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">474,092</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Income (loss) before income tax&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,162,081</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(1,434,728)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(258,176)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">210,739</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">679,916</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Income tax&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">222,491</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">(60,494)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">161,997</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Net income (loss)&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">1,939,590</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">(1,374,234)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">(258,176)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">210,739</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">517,919</P></TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in; padding-top: 15pt"><B>Other Data</B></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Mexico</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>United
        States</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Brazil</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Operations
        between Segments</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Total</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Depreciation and amortization&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">757,873</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">358,872</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,161</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,117,906</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Total assets&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">27,340,625</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">11,078,721</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3,331,720</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(5,854,577)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">35,896,489</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Total liabilities&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3,476,065</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">9,585,026</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">909,330</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(5,854,577)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">8,115,844</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Additions of property, plant and equipment, net&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">198,811</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">924,241</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">735,306</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,858,358</TD></TR>

<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; padding-top: 15pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: center"><B>For
        the year ended December 31, 2013</B></P></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <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"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Mexico</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>United
        States</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Brazil</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Operations
        between Segments</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Total</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(in thousands of pesos)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Net sales&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">13,792,466</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10,576,474</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">24,368,940</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Cost of sales&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">11,055,918</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">11,354,349</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">22,410,267</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Gross profit&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,736,548</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(777,875)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,958,673</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Administrative expenses&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">733,449</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">383,210</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,116,659</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Other expense, net&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">47,854</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">11,307</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">59,161</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Interest income&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">16,903</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3,495</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">20,398</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Interest expense&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">8,214</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">25,479</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(4,979)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">28,714</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Exchange loss&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">66,506</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">66,506</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Income (loss) before income tax&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,897,428</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(1,194,376)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(4,979)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">708,031</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Income tax&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">(159,570)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">(121,998)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right">(281,568)</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Net income (loss)&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">2,056,998</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">(1,072,378)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">&mdash;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">(4,979)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="border-bottom: Black 1.5pt double; margin: 0; text-align: right">989,599</P></TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in; padding-top: 15pt"><B>Other Data</B></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Mexico</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>United
        States</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Brazil</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Operations
        between Segments</B></P></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 15pt"><P STYLE="border-bottom: Black 0.5pt solid; margin: 0; text-align: right"><B>Total</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Depreciation and amortization&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">796,705</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">256,195</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,052,900</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Total assets&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">24,300,374</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">9,164,691</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,705,279</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(2,890,497)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">33,279,847</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Total liabilities&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,760,999</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">6,512,396</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">621,984</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(2,890,497)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">7,004,882</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in">Additions of property, plant and equipment, net&#9;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">308,401</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,265,994</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,603,555</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3,177,950</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-indent: 35.45pt">Our net sales by product during 2015,
2014 and 2013 were 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>
    <TD COLSPAN="4" STYLE="vertical-align: top; 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>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2015</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2014</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2013</B></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; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,270,459</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,348,564</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,069,051</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;&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,957,388</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,720,764</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,531,259</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: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,272,580</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,435,075</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,497,021</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: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,235,167</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,907,453</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,062,481</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: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">906,243</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">746,161</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">548,630</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: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,568,417</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,310,093</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,373,022</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: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,750,380</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,646,684</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,408,692</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: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,515,187</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,713,967</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,878,784</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">Total&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,475,821</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">26,828,761</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt double; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,368,940</FONT></TD></TR>
<TR>
    <TD STYLE="width: 52%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0; text-indent: 0.5in">Our net sales by country or region during
2015, 2014 and 2013 are as follows:</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 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"><B>SALES </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(in thousands of pesos)</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>2015</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>2014</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>2013</B></P></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">Mexico&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,543,446</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,165,166</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,633,192</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">USA&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,417,392</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,941,251</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,051,087</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">Canada&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">371,610</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">493,911</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">535,164</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">Latin America&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">134,031</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">216,293</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">136,130</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 (Europe and Asia)&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,342</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,140</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,367</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">Total&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,475,821</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">26,828,761</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24,368,940</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">Consolidated Statements of Comprehensive Income</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2014 and 2015</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 decreased 9%, to Ps. 24,476
million in 2015 compared to Ps. 26,829 million in 2014. This decrease resulted principally from a 1% decrease in the average price
per ton of steel products and an decrease of 171 thousand shipments of finished steel products. Total sales outside of Mexico decreased
22%, to Ps. 9,932 million in 2015 compared with Ps. 12,664 million in the same period of 2014. Total sales in Mexico increased
3%, from Ps. 14,165 million in 2014 to Ps. 14,543 million in 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
decreased 8%, to 2.026 million tons in 2015, compared to 2.197 million tons in 2014. Total sales volume outside of Mexico of finished
steel products decreased 24% to 0.632 million tons in 2015, compared to 0.837 million tons in 2014, while total Mexican sales increased
2%, from 1.360 million tons in 2014, compared to 1.394 million tons in 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The average price of steel products decreased
1% in 2015 compared to 2014.</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 decreased 9%, from
Ps. 25,492 million in 2014 to Ps. 23,097 million in 2015, which decrease is mainly attributable to (i) a 1% decrease in the average
price per ton of steel products sold, and (ii) an decrease of 171 thousand tons of finished steel products shipped. Cost of sales
as a percentage of net sales was 95% in 2015 and 2014. We experienced higher cost of sales at our Republic facilities, mainly a
result of (i) higher labor</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in">costs corresponding to our U.S. operations,
and (ii) the higher cost of raw materials, which our U.S. operations use in the production of SBQ steel. Hourly wages at our Mexican
operations were approximately U.S.$1.7 per hour in 2015 and $2.0 per hour in 2014, compared to U.S.$52.5 and U.S.$50 per hour for
2015 and 2014, 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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in"><I>Impairment of Property, Plant and Equipment</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 35.45pt">We made an analysis of the fair value
of the Lorain facility with the assistance of an independent valuation firm and determined the net book value exceeded the fair
value by approximately Ps. 2,072 million (U.S.$130.7 million) and as such, recognized an asset impairment of this amount during
the year ended December 31, 2015.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our gross loss was Ps. 693 million in
2015 compared to Ps. 1,337 million of gross profit in 2014. This gross loss is attributable mainly to the impairment of property,
plant and equipment and a decrease of 171 thousand tons of finished steel products shipped. As a percentage of net sales, our gross
loss was 3% in 2015 and our gross profit was 5% in 2014.</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 32%, to Ps. 1,582 million in 2015, compared to Ps. 1,194 million in 2014. The increase
of Ps. 388 million in 2015 compared to 2014, is attributable principally to (i) Ps. 178 million in royalties paid to Industrias
CH for use of their brands, (ii) Ps. 78 million related to fees paid for legal services and (iii) expenses of Ps. 76 million corresponding
to severance payments in Republic. In 2015 and 2014, our general and administrative expenses included Ps. 256 million and Ps. 254
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 6% in 2015 and 4% in 2014. Depreciation and amortization expense were Ps. 419 million in 2015 compared to Ps. 393
million in 2014.</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.
173 million in 2015, reflecting (i) income of Ps. 4 million related to the sale of scrap, (ii) income of Ps. 174 million related
to proceeds from a settlement with a client and (iii) an expense related to other financial operations of Ps. 5 million.<FONT STYLE="background-color: white">
</FONT></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.
61 million in 2014, reflecting (i) expenses of Ps. 1 million corresponding to land remediation work at Pacific Steel (ii) an expense
of Ps. 2 million related to the write-off of certain account balances (iii) an income of Ps. 29 million related to the sale of
scrap and (iv) an income related to other financial operations of Ps. 35 million.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest income of Ps.
34 million in 2015 compared to Ps. 25 million in 2014. This increase is attributable mainly to better interest rates negotiated
with our lenders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest expense of Ps.
40 million in 2015 compared to Ps. 23 million in 2014. This increase was principally due to negotiations with our lenders in connection
with commissions payable to them.</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a foreign exchange loss of
Ps. 382 million in 2015 compared to an exchange gain of Ps. 474 million in 2014; this foreign exchange loss reflected the 47% depreciation
of the Brazilian real against the dollar and the 17.7% depreciation of the peso against the dollar in 2015 compared to the 13%
depreciation of the peso against the dollar in 2014.</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 2015 we recorded an income tax provision
of Ps. 771 million, which included an income tax provision of Ps. 1,598 million and an income tax benefit for deferred income taxes
of Ps. 827 million. The income tax of 2015 includes Ps. 1,333 million that was paid by Simec International 6 S.A. de C.V. and Simec
International 8 S.A. de C.V. arising from a review by the tax authority initiated in July 2015 to the fiscal year ended December
31, 2010, by difference of opinion on the deduction of losses on disposal of treasury bonds of the United States. In 2014 we recorded
an income tax provision of Ps. 162 million, which included an income tax provision of Ps. 278 million and an income tax benefit
for deferred income taxes of Ps. 116 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 2015
and 2014 were 22.5% and 23.8%, respectively. According to the Income Tax Law in Mexico, the tax rate for the year 2015 and years
thereafter is 30%. We have implemented the practice of recognizing the benefit derived from the amortization of tax losses for
the period in which such losses are actually amortized. In 2015 and 2014, we amortized tax losses which generated a benefit on
income tax of approximately Ps. 39 million and Ps. 145 million, respectively. These effects caused our effective tax rates during
2015 and 2014 to be lower than the statutory tax rate.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded net loss of Ps. 3,261 million
in 2015, compared to net income of Ps. 518 million in 2014. This loss attributable mainly to (i) a decrease of 171 thousand shipments
of finished steel products, (ii) an expense of Ps. 2,072 million related to impairment charges in Republic, (iii) a foreign exchange
loss of Ps. 419 million in 2015 compared to Ps. 474 million of foreign exchange gain in 2014 and (iv) the Ps. 1,333 million that
was paid by Simec International 6, S.A. de C.V. and Simec International 8, S.A. de C.V. derived by a review initiated in July 2015
to the fiscal year 2010 by the tax authority, by difference of opinion on the deduction of losses on disposal of treasury bonds
of the United States.</P>

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2014 and 2015</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 3%, to Ps. 14,978
million in 2015 compared to Ps. 14,518 million in 2014. This increase resulted principally from a 1% increase in the average price
per ton of steel products and an increase of 33 thousand tons of shipments of finished steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
increased 3%, to 1.452 million tons in 2015, compared to 1.419 million tons in 2014.</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
1% in 2015 compared to 2014.</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 decreased 7%, from
Ps. 12,076 million in 2014 to Ps. 11,248 million in 2015, which decrease is mainly attributable to a 9% decrease in the prices
of raw materials used for the production of finished products. As a percentage of net sales, our cost of sales was 75% in 2015,
compared to 83% in 2014.</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our gross profit increased 53%, to Ps.
3,731 million in 2015 compared to Ps. 2,442 million in 2014. This increase is attributable mainly to a 9% decrease in the prices
of raw materials used for the production of finished products and an increase of 33 thousand tons of shipments of finished steel
products. As a percentage of net sales, our gross profit was 25% in 2015, compared to 17% in 2014.</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 35%, to Ps. 1,101 million in 2015, compared to Ps. 818 million in 2014. Such increase
is attributable principally to (i) an administrative expense of Ps. 178 million in royalties paid to Industrias CH for use of their
brands, (ii) Ps. 78 million related to fees paid for legal services and (iii) other administrative expenses in our plants in Mexico.
In 2015 and 2014, our general and administrative expenses included Ps. 245 million and Ps. 245 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">Administrative expenses as a percentage
of net sales were 7% in 2015 and 6% in 2014. Depreciation and amortization expense were Ps. 366 million in 2015 compared to Ps.
331 million in 2014.</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.
6 million in 2015, reflecting (i) an income of Ps. 4 million related to the sale of scrap and (ii) other income related to other
financial operations of Ps. 2 million.<FONT STYLE="background-color: white"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other income, net of Ps.
30 million in 2014, reflecting (i) an expenses of Ps. 1 million corresponding to land remediation work at Pacific Steel (ii) an
expense of Ps. 2 million related to the depuration of some account balances (iii) an income of Ps. 4 million related to adjustments
in inflation for taxes returned to us and (iv) other income related to other financial operations of Ps. 29 million.<FONT STYLE="background-color: white">
</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest income of Ps.
34 million in 2015 compared to Ps. 25 million in 2014. This increase is attributable mainly to better interest rates negotiated
with our lenders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest expense of Ps.
10 million in 2015 compared to Ps. 7 million in 2014. This increase was principally due to negotiations with our lenders in connection
with commissions payable to them.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a foreign exchange gain of
Ps. 840 million in 2015 compared to an exchange gain of Ps. 491 million in 2014; this foreign exchange reflected the 17.7% depreciation
of the peso against the dollar in 2015 and the 47% depreciation of the Brazilian real against the dollar in 2015.</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 2015 we recorded an income tax provision
of Ps. 1,413 million, which included an income tax provision of Ps. 1,598 million and an income tax benefit for deferred income
taxes of Ps. 185 million. The income tax of 2015 includes Ps. 1,333 million that was paid by Simec International 6 S.A. de C.V.
and Simec International 8 S.A. de C.V. arising from a review by the tax authority initiated in July 2015 to the fiscal year ended
December 31, 2010, by difference of opinion on the deduction of losses on disposal of treasury bonds of the United States. In 2014
we recorded an income tax provision of Ps. 222 million, which included an income tax provision of Ps. 278 million and an income
tax benefit for deferred income taxes of Ps. 56 million.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">According to the Income Tax Law in Mexico,
the tax rate for the year 2015 and years thereafter is 30%.</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. 2,087 million
in 2015, compared to net income of Ps. 1,940 million in 2014. Net income for 2015 remains virtually equal to the net income generated
in 2014, due to the increase in tons sold that offset the additional expense of income tax.</P>

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2014 and 2015</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 decreased 23%, to Ps. 9,468
million in 2015 compared to Ps. 12,310 million in 2014. This decrease resulted principally from a decrease of 208 thousand tons
of shipments of finished steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
decreased 27%, to 570 thousand tons in 2015, compared to 778 thousand tons in 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The average price of steel products in
pesos increased 5% in 2015 (in dollars decreased 14%) compared to 2014, mainly as a result of lower prices in the steel market.
Also, surcharges of scrap have affected the sales price due to a consistently low level of scrap cost.</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 decreased 12%, from
Ps. 13,416 million in 2014 to Ps. 11,829 million in 2015, which decrease is mainly attributable to a 27% decrease in shipments
of finished steel products and the decrease of 25% in the prices of raw materials used for the production of finished products.
In 2015 we made a charge to the cost of sales for an inventory valuation allowance of Ps. 681 million. Cost of sales as a percentage
of net sales was 125% in 2015, compared to 109% in 2014.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 35.45pt">We made an analysis of the fair value
of the Lorain facility with the assistance of an independent valuation firm and determined the net book value exceeded the fair
value by approximately Ps. 2,072 million (U.S.$130.7 million) and as such, recognized an asset impairment of this amount during
the year ended December 31, 2015.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our gross loss was Ps. 4,433 million
in 2015 compared to Ps. 1,106 million of gross loss in 2014. This gross loss is attributable mainly to the impairment of property,
plant and equipment of Ps. 2,072 million (U.S.$130.7 million), a decrease of 208 thousand tons of shipments of finished steel products
and the charge to the cost of sales for an inventory valuation allowance of Ps. 681 million. As a percentage of net sales, our
gross loss was 47% in 2015, compared to 9% of gross loss in 2014. The selling steel prices throughout the year also impacted our
margin since prices for steel products charged to our customers were gradually lower than our costs of steel purchases as a result
of the time lag between the production and sales cycles.</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 36%, to Ps. 457 million in 2015, compared to Ps. 335 million in 2014. The administrative
expenses in dollars increased by U.S.$3.6 million, due to the expenses of U.S.$3.8 million corresponding to severance payments
(Ps. 76 million), the other difference in pesos of Ps. 46 million corresponds to 17.7% depreciation of the peso against the dollar,
the amount in pesos is recorded as an increase.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Administrative expenses as a percentage
of net sales were 5% in 2015 and 3% in 2014. Depreciation and amortization expense were Ps. 67 million in 2015 compared to Ps.
62 million in 2014.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other Income, 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.
184 million in 2015, reflecting (i) income of Ps. 174 million related to proceeds from a settlement with a client and (ii) other
income, net of Ps. 10 million related to other financial operations.</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.
31 million in 2014, reflecting an income of (i) Ps. 29 million related to the sale of scrap and (ii) Ps. 2 million related to other
financial operations.</P>

<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. 0.2 million in 2015 compared to Ps. 0.4 million in 2014.</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. 47 million in 2015 compared to Ps. 25 million in 2014.</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 2015 we recorded an income tax benefit
of Ps. 642 million for deferred income taxes. In 2014 we recorded an income tax benefit of Ps. 60 million for deferred income taxes.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded net loss of Ps. 4,111 million
in 2015, compared to net loss of Ps. 1,374 million in 2014. This increase in our net loss is attributable mainly to (i) an expense
of Ps. 2,072 million related to asset impairment charges, (ii) a decrease of 208 thousand tons of shipments of finished steel products
and (iii) the charge to the cost of sales for an inventory valuation allowance of Ps. 681 million.</P>

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2014 and 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our segment in Brazil started operations
in late 2015; the information presented is not comparable with 2014 because in that year we did not have production and sale of
our products.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our net sales were Ps. 29 million in
2015. Our shipments of finished steel products in 2015 were 4 thousand tons.</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 was Ps. 20 million
in 2015. As a percentage of net sales, our cost of sales was 69% in 2015.</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 was Ps. 9 million in
2015. As a percentage of net sales, our gross loss was 31% in 2015. The selling steel prices throughout the year also impacted
our margin since prices for steel products charged to our customers were gradually lower than our costs of steel purchases as a
result of the time lag between the production and sales cycles.</P>

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<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) were Ps. 24 million in 2015. Operating expenses as a percentage of net sales were 83% in 2015. Depreciation
and amortization expense were Ps. 1 million in 2015.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expense, net of Ps.
16 million in 2015, reflecting other expenses related to other financial operations.</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. 25 million in 2015 compared to Ps. 15 million in 2014.</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a foreign exchange loss of
Ps. 497 million in 2015 compared to an exchange loss of Ps. 203 million in 2014; this foreign exchange reflected the 47% depreciation
of the Brazilian real against the dollar in 2015.</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 2015 we did not record any income
tax for 2015.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a net loss of Ps. 553 million
in 2015. Our net loss is attributable mainly to our foreign exchange loss of Ps. 497 million.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0">Consolidated Statements of Comprehensive Income</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2013 and 2014</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 10%, to Ps. 26,829
million in 2014 compared to Ps. 24,369 million in 2013. This increase resulted principally from a 3% increase in the average price
per ton of steel products and an increase of 133 thousand shipments of finished steel products. Total sales outside of Mexico increased
18%, to Ps. 12,664 million in 2014 compared with Ps. 10,736 million in the same period of 2013. Total sales in Mexico increased
4%, from Ps. 13,633 million in 2013 to Ps. 14,165 million in 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
increased 6%, to 2.197 million tons in 2014, compared to 2.064 million tons in 2013. Total sales volume outside of Mexico of finished
steel products increased 8% to 0.837 million tons in 2014, compared to 0.776 million tons in 2013, while total Mexican sales increased
6%, from 1.288 million tons in 2013, compared to 1.360 million tons in 2014.</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
3% in 2014 compared to 2013, mainly as a result of an increase in sales of SBQ. Also, surcharges of scrap in our United States
operations, have affected the sales price due to a consistently low level of scrap cost.</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 14%, from
Ps. 22,410 million in 2013 to Ps. 25,492 million in 2014, which increase is mainly attributable to (i) a 7% increase in the average
price per ton of steel products sold, and (ii) an increase of 133 thousand tons of finished steel products shipped. Cost of sales
as a percentage of net sales was 95% in 2014, compared to 92% in 2013. We experienced higher cost of sales at our Republic facilities,
mainly a result of</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">(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.$2.0 per hour in 2014 and $2.1 per hour in 2013, compared to U.S.$50 and U.S.$47.2 per hour for
2014 and 2013, 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 32%, to Ps.
1,337 million in 2014 compared to Ps. 1,959 million in 2013. This decrease is attributable mainly to an increase of approximately
7% in the average price per ton of steel products sold. As a percentage of net sales, our gross profit was 5% in 2014, compared
to 8% in 2013.</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 7%, to Ps. 1,194 million in 2014, compared to Ps. 1,117 million in 2013. The increase
of Ps. 77 million in 2014 compared to 2013, is attributable principally to administrative expenses of Ps. 51.1 million (including
Ps. 1.1 million for depreciation) in our plant under construction in Brazil (in 2013 we did not have administrative expenses in
Brazil). In 2014 and 2013, our general and administrative expenses included Ps. 254 million and Ps. 246 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 2014 and 5% in 2013. Depreciation and amortization expense were Ps. 393 million in 2014 compared to Ps. 385
million in 2013.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Other Operating 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.
61 million in 2014, reflecting (i) expenses of Ps. 1 million corresponding to land remediation work at Pacific Steel (ii) an expense
of Ps. 2 million related to the write-off of certain account balances (iii) an income of Ps. 29 million related to the sale of
scrap and (iv) an income related to other financial operations of Ps. 35 million.<FONT STYLE="background-color: white"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expense, net of Ps.
59 million in 2013, reflecting (i) expenses of Ps. 8 million corresponding to land remediation work at Pacific Steel (ii) an expense
of Ps. 62 million related to the write-off of certain account balances and (iii) an income related to other financial operations
of Ps. 11 million.<FONT STYLE="background-color: white"> </FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest income of Ps.
25 million in 2014 compared to Ps. 20 million in 2013. This increase is attributable mainly to better interest rates negotiated
with our lenders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest expense of Ps.
23 million in 2014 compared to Ps. 28 million in 2013. This decrease was principally due to negotiations with our lenders in connection
with commissions payable to them.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a foreign exchange gain of
Ps. 474 million in 2014 compared to an exchange loss of Ps. 67 million in 2013; this foreign exchange gain reflected the 13% depreciation
of the peso against the dollar in 2014 and the 0.7% depreciation of the peso against the dollar in 2013.</P>

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<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 2014 we recorded an income tax provision
of Ps. 162 million, which included an income tax provision of Ps. 278 million and an income tax benefit for deferred income taxes
of Ps. 116 million. In 2013 we recorded an income tax benefit of Ps. 282 million, which included an income tax provision of Ps.
57 million and an income tax benefit for deferred income taxes and deferred Flat-Rate Business Tax (FRBT) of Ps. 339 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 2014
and 2013 were 23.8% and (39.8%), 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 Mexico,
the tax rate for the year 2014 and years thereafter is 30%. We have implemented the practice of recognizing the benefit derived
from the amortization of tax losses for the period in which such losses are actually amortized. In 2014 and 2013, we amortized
tax losses which generated a benefit on income tax of approximately Ps. 145 million and Ps. 541 million, respectively. Additionally,
in 2013 a provision of Ps. 274 million was canceled due to a repeal of the FBRT. These effects created a credit balance in 2013
and caused our effective tax rate during 2014 to be lower than the statutory tax rate.</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 was
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 was payable only to the extent it exceeded 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, 2014 and 2013
were determined based on the specific rules of each tax. The FRBT was abolished for the year 2014 and years thereafter.</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. 518 million
in 2014, compared to net income of Ps. 990 million in 2013. This decrease attributable mainly to (i) a 7% increase in the average
price per ton of steel products sold (ii) the increase of 7% in our administrative expenses, principally in our plant under construction
in Brazil, (iii) a foreign exchange gain of Ps. 474 million in 2014 compared to Ps. 67 million of foreign exchange loss in 2013
and (iv) the provision of income tax for Ps. 162 million in 2014 compared to an income tax benefit of Ps. 282 million in 2013.</P>

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2013 and 2014</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 5%, to Ps. 14,518
million in 2014 compared to Ps. 13,792 million in 2013. This increase resulted principally from a 2% increase in the average price
per ton of steel products and an increase of 44 thousand tons of shipments of finished steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
increased 3%, to 1.419 million tons in 2014, compared to 1.375 million tons in 2013.</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 2014 compared to 2013, mainly as a result of a increase in sales of SBQ.</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 9%, from
Ps. 11,056 million in 2013 to Ps. 12,076 million in 2014, which increase is mainly attributable to a 7% increase in the average
price per ton of steel products sold, resulting from an 18% increase in shipments of finished steel products, principally SBQ products
(which manufacturing cost is higher</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"> than other products that we manufacture). Cost of sales as a percentage of net sales was 83%
in 2014, compared to 80% in 2013.</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 11%, to Ps.
2,442 million in 2014 compared to Ps. 2,736 million in 2013. This decrease is attributable mainly to a 7% increase in the average
price per ton of steel products sold, resulting from an increase of approximately 18% in shipments of finished steel products,
principally SBQ products (which manufacturing cost is higher than other products that we manufacture) compared to an increase of
approximately 2% in the average price of steel products volumes shipped. As a percentage of net sales, our gross profit was 17%
in 2014, compared to 20% in 2013.</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. 859 million in 2014, compared to Ps. 733 million in 2013. Such increase is
attributable principally to an administrative expenses of Ps. 51.1 million (including Ps. 1.1 million of depreciation) in our plant
under construction in Brazil (in 2013 we did not have administrative expenses in Brazil) and other administrative expenses in our
plants in Mexico. In 2014 and 2013, our general and administrative expenses included Ps. 245 million and Ps. 246 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 6% in 2014 and 5% in 2013. Depreciation and amortization expense were Ps. 331 million in 2014 compared to Ps. 323
million in 2013.</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.
30 million in 2014, reflecting (i) an expenses of Ps. 1 million corresponding to land remediation work at Pacific Steel (ii) an
expense of Ps. 2 million related to the depuration of some account balances (iii) an income of Ps. 4 million related to adjustments
in inflation for taxes returned to us and (iv) other income related to other financial operations of Ps. 29 million.<FONT STYLE="background-color: white">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expense, net of Ps.
48 million in 2013, reflecting (i) expenses of Ps. 8 million corresponding to land remediation work at Pacific Steel (ii) an expense
of Ps. 51 million related to the depuration of some account balances and (iii) other income related to other financial operations
of Ps. 11 million.<FONT STYLE="background-color: white"> </FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest income of Ps.
25 million in 2014 compared to Ps. 17 million in 2013. This increase is attributable mainly to better interest rates negotiated
with our lenders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest expense of Ps.
7 million in 2014 compared to Ps. 8 million in 2013. This decrease was principally due to negotiations with our lenders in connection
with commissions payable to them.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded a foreign exchange gain of
Ps. 474 million in 2014 compared to an exchange loss of Ps. 67 million in 2013; this foreign exchange reflected the 13% depreciation
of the peso against the dollar in 2014 and the 0.7% depreciation of the peso against the dollar in 2013.</P>


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<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 2014 we recorded an income tax provision
of Ps. 222 million, which included an income tax provision of Ps. 278 million and an income tax benefit for deferred income taxes
of Ps. 56 million. In 2013 we recorded an income tax benefit of Ps. 160 million, which included an income tax provision of Ps.
57 million and an income tax benefit for deferred income taxes and deferred FRBT of Ps. 217 million.</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 Mexico,
the tax rate for the year 2014 and years thereafter is 30%.</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 was
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 was payable only to the extent it exceeded 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, 2014 and 2013
were determined based on the specific rules of each tax. The FRBT was abolished for the year 2014 and years thereafter.</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. 1,883 million
in 2014, compared to net income of Ps. 2,057 million in 2013. This decrease attributable mainly to (i) a 7% increase in the average
price per ton of steel products sold,(ii) an increase in our administrative expenses (iii) a foreign exchange gain of Ps. 474 million
in 2014 compared to Ps. 67 million of foreign exchange loss in 2013 and (iv) the provision of income tax for Ps. 222 million in
2014 compared to an income tax benefit of Ps. 160 million in 2013.</P>

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Comparison of Years Ended December 31, 2013 and 2014</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 16%, to Ps. 12,310
million in 2014 compared to Ps. 10,576 million in 2013. This increase resulted principally from a 3% increase in the average price
per ton of steel products and an increase of 89 thousand tons of shipments of finished steel products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Shipments of finished steel products
increased 13%, to 778 thousand tons in 2014, compared to 689 thousand tons in 2013.</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
3% in 2014 compared to 2013, mainly as a result of higher prices in the steel market. Also, surcharges of scrap have affected the
sales price due to a consistently low level of scrap cost.</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 18%, from
Ps. 11,354 million in 2013 to Ps. 13,416 million in 2014, which increase is mainly attributable to a 13% increase in shipments
of finished steel products, the increase of 5% in the average price per ton of steel products sold. Cost of sales as a percentage
of net sales was 109% in 2014, compared to 107% in 2013.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our gross loss was Ps. 1,106 million
in 2014 compared to Ps. 778 million of gross loss in 2013. This gross loss is attributable mainly to an increase of 5% in the average
price per ton of steel products sold. As a percentage of net sales, our gross loss was 9% in 2014, compared to 7% of gross loss
in 2013. The selling steel prices throughout </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">the year also impacted our margin since prices for steel products charged to our customers
were gradually lower than our costs of steel purchases as a result of the time lag between the production and sales cycles.</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) decreased 13%, to Ps. 335 million in 2014, compared to Ps. 383 million in 2013.</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 3% in 2014 and 4% in 2013. Depreciation and amortization expense were Ps. 62 million in 2014 compared to Ps. 62
million in 2013.</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.
31 million in 2014, reflecting an income of (i) Ps. 29 million related to the sale of scrap and (ii) Ps. 2 million related to other
financial operations.<FONT STYLE="background-color: white"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded other expense, net of Ps.
11 million in 2013, reflecting an expense of Ps. 11 million related to other financial operations.<FONT STYLE="background-color: white">
</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest income of Ps.
0.4 million in 2014 compared to Ps. 3 million in 2013.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded an interest expense of Ps.
25 million in 2014 compared to Ps. 25 million in 2013.</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 2014 we recorded an income tax benefit
of Ps. 60 million for deferred income taxes. In 2013 we recorded an income tax benefit of Ps. 122 million, for deferred income
taxes.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We recorded net loss of Ps. 1,374 million
in 2014, compared to net loss of Ps. 1,072 million in 2013. This increase in our net loss is attributable mainly to the increase
of 5% in the average price per ton of steel products sold including the costs associated with the new electric arc furnace which
began operations in July 2014 in our plant in Lorain, Ohio.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026571"></A><A NAME="a_Toc322026129"></A>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 readily apparent from other sources. Accordingly, actual results may differ
materially from current expectations under different assumptions or conditions.</P>


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<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.
Based on the company&rsquo;s evaluation, it determined the amount of deferred tax assets that is more likely than not to be realized
in the future against those taxable profits.</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 June of 2015 Republic Steel temporarily
idled the newly constructed electric arc furnace at the Lorain facility in response to the severe economic downturn in the energy
exploration sector following the sharp drop in the price of oil which has led to significant market declines and demand for product.
As a consequence of this event management determined a triggering event took place to where the long-lived assets at the Lorain
facility may not be fully recoverable. Management performed an analysis of the fair value of the Lorain facility with the assistance
of an independent valuation firm and determined the net book value exceeded the fair value by approximately U.S.$130.7 million
and as such recognized an asset impairment of this amount during the year ended December 31, 2015. The fair value determination
at the Lorain facility was based on an independent valuation of the Lorain melt shop assets using the comparable match method of
the market approach. The income approach was not considered an appropriate fair value measurement due to the absence of reliable
forecast data as the facility was idled indefinitely in early 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Subsequent to year end, the entire Lorain
facility was temporarily idled effective March 31, 2016 and as of the date of this report, management has no near-term plans to
restart the facility, and the expectation is that it will be restarted when market conditions improve substantially, particularly
in the oil and gas industry. We have property, plant and equipment with a net book value of approximately U.S.$32.2 million as
of December 31, 2015, pertaining to the Lorain Ohio facility after recording the impairment charge of U.S.$130.7 million. The impairment
charge did not impact the cash flows, as it was not a cash expenditures. Management further assessed if there were any impairments
at the Company&rsquo;s other asset groups in accordance with the Financial Accounting Standards Board (FASB), Accounting Standards
Codification 360 (ASC 360) and determined that as of December 31, 2015, no other asset groups were impaired based on current projections.</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>


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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>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, 2014 and 2015 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 assumptions used in the valuation model. As of December 31, 2014 and 2015, 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, 2015, 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: 13%; 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 of approximately 5% in 2016 and 2017, mainly attributable to the increase in volume
by mesh products, as a result of an investment to increase the production of mesh by approximately 42%. After 2017, 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, 2014, 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 of approximately 5% in 2015 and 2016, mainly attributable to the increase in volume
by mesh products, as a result of an investment to increase the production of mesh by approximately 42%. After 2016, 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">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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026572"></A><A NAME="a_Toc322026130"></A>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 some of them are not yet effective:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">IFRS effective since 2016:</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: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IAS 16, Property, Plant and Equipment;</TD></TR></TABLE>

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<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IAS 38, Intangible Assets;</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: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IFRS 11, Joint arrangements;</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: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IFRS 10, Consolidated 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: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IAS 28, Investment in Associates;</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: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IFRS 5, Non-current Assets Held for Sale and Discontinued Operations;</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: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IFRS 7, Financial Instruments: Disclosures;</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: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IAS 19, Employee Benefits; 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: 56.7pt"></TD><TD STYLE="width: 15.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IAS 34.- Interim Financial Reporting.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">IFRS to be effective from 2017:</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>IAS 12, Recognition of Deferred Tax Assets for Unrealized Losses.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">IFRS to be effective from 2018:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IFRS 15, Revenue for Contracts with Customers; 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>IFRS 9, Financial Instruments.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">IFRS to be effective from 2019:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>IFRS 16, Leases.</TD></TR></TABLE>

<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"><A NAME="a_Toc322026580"></A><A NAME="a_Toc322026138"></A><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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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, 2013, 2014 and 2015,
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, 2015 and 2014, Republic had U.S.$50 million, outstanding
under this line of credit. See Note 18 to our consolidated financial statements included elsewhere herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On May 30, 2008, we acquired 100% of
the stock of Grupo San for approximately U.S.$844 million (Ps. 8,730 million). To finance the purchase price, on May 29, 2008 we
accepted a loan from Banco Inbursa S.A. for U.S.$120 million (Ps. 1,325 million) at Libor + 1.45% that was due on May 29, 2009,
which debt has since been repaid in full. We also received U.S.$112.5 million (Ps. 1,169 million) of capital stock increase from
Industrias CH 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, 2011 we had cash and cash equivalents of Ps. 6,537 million, as of December 31, 2012 we had cash and cash equivalents
of Ps. 8,102 million, as of December 31, 2013 we had cash and cash equivalents of Ps. 6,985 million, as of December 31, 2014 we
had cash and cash equivalents of Ps. 7,003 million and as of December 31, 2015 we had cash and cash equivalents of Ps. 6,224 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 three years ended December 31, 2013, 2014 and 2015:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Years ended
        December 31,</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 52%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; 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>2013</B></P></TD>
    <TD STYLE="vertical-align: bottom; 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>2014</B></P></TD>
    <TD STYLE="vertical-align: bottom; 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>2015</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">Funds provided by operating activities&#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">2,051</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,370</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(382)</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">Funds used in investing activities&#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">(2,947)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,060)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;(655)</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">Funds used by financing activities&#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">(259)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(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">(285)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our net funds used by operations were
Ps. 382 million in 2015 compared to Ps. 1,370 million of net funds provided by operations in 2014. The decrease of Ps. 1,752 million
in the net funds provided by operation between 2015 and 2014 originated mainly from the decrease in our gross profit and the income
tax of Ps. 1.3 million paid in 2015 for a review of prior periods. Our net funds provided by operations were Ps. 1,370 million
in 2014 compared to Ps. 2,051 million in 2013. The decrease of Ps. 681 million in the net funds provided by operation between 2014
and 2013 originated mainly from the decrease in our gross profit.</P>


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<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. 655 million in 2015 compared to Ps. 2,060 million in 2014. In addition we invested
Ps. 374 million in the acquisition of shares of public companies for trading. Our net funds used in investing activities were Ps.
2,060 million in 2014 compared to Ps. 2,947 million in 2013. In addition we invested Ps. 305 million in the acquisition of shares
of public companies for trading.</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 2015 were Ps. 285 million, compared to Ps. 48 million used by financing activities in 2014. In 2015 we used Ps. 245 million
to repurchase of our own shares compared to Ps. 26 million in 2014. Our net funds used by financing activities in 2014 were Ps.
48 million, compared to Ps. 259 million by financing activities in 2013. In 2014 we used Ps. 26 million to repurchase of our own
shares compared to Ps. 230 million in 2013. 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 in 2015 and 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of December 31, 2015, 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 August 21, 2012, we entered into a
contract with the supplier Russula, SA (&ldquo;Russula&rdquo;) for the development of a treatment plant wastewater for our subsidiary
GV do Brasil Industria e Comercio of A&ccedil;o LTDA for an amount of U.S.$5.4 million. At December 31, 2015 payment for only 10%
remains outstanding, which will be made against delivery of the final acceptance certificate of the plant and the warranty. Due
to a series of delays in the completion of the assembly by Russula, final payment is pending and is estimated to be paid at the
end of 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On August 30, 2012, we entered into a
contract with the provider Mochetti Gino Industrie Sollevamenti S.r.l. for the development of two overhead cranes for our subsidiary
GV do Brasil Industria e Comercio of A&ccedil;o LTDA for an amount of U.S.$&nbsp;4.1 million. At December 31, 2015 payment for
only 5% remains outstanding and the balance will be paid upon delivery of the pro forma invoice and final acceptance certificate.
Due to a failure to make the final testing of the equipment, payment has not been made and is expected at the end of 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On September 5, 2015 a turnkey contract
became effective with Danieli &amp; Officine Meccaniche Spa (Danieli) for the supply and erection (except for civil engineering)
in Tlaxcala, M&eacute;xico, of a new Minimill for the production of 600,000 SBQ, with a total amount of U.S.$203.5 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The off-shore portion of the contract
price equal to U.S.$152.5 million, which will be paid to Danieli in different installments according to the project&rsquo;s progress,
and the on-shore portion of the contract price equal to U.S.$51 million, which will be paid to certain local suppliers of Danieli
on monthly basis, as instructed by them.</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"><A NAME="a_Toc322026581"></A><A NAME="a_Toc322026139"></A><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 registered with 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>

<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"><A NAME="a_Toc322026582"></A><A NAME="a_Toc322026140"></A><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 six months of 2016 net sales
decreased 3% compared to the first six months of 2015. Sales in tons of finished steel decreased 1% in the first six months of
2016 compared with the six months of 2015. Prices of finished products sold in the first six months of 2016 decreased approximately
1% compared to the first six months of 2015.</P>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_Toc322026583"></A><A NAME="a_Toc322026141"></A>&nbsp;</B></P>

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<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"><A NAME="a_Toc322026584"></A><A NAME="a_Toc322026142"></A><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, 2015:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; margin-bottom: 12pt">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="5" 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>Maturity</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 13%; 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>Less than
        1 year</B></P></TD>
    <TD STYLE="width: 13%; 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>1&ndash;
        3 years</B></P></TD>
    <TD STYLE="width: 13%; 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>4&ndash;
        5 years</B></P></TD>
    <TD STYLE="width: 13%; 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>In excess
        of 5 years</B></P></TD>
    <TD STYLE="width: 13%; 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 STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(millions of pesos)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Short-term debt obligations of related parties<SUP>(1)</SUP>&#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">&#9;887</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;&mdash;</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;&mdash;</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;&mdash;</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;887</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Short-term debt obligations&#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">&#9;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">&#9;&mdash;</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;&mdash;</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;&mdash;</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;5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.1in; text-indent: -0.1in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Long-term contractual obligations (see paragraph below)&#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">&#9;19</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;34</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;&mdash;</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;&mdash;</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;53</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.15in; padding-left: 0.2in; text-indent: -0.1in; text-align: left"><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">&#9;911</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;34</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;&mdash;</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;&mdash;</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;945</FONT></TD></TR>
</TABLE>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Ps. 881 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. 6 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 2015, 2014 and 2013, the expenses for operating leases were U.S.$1.5 million, U.S.$1.3
million and U.S.$6.9 million, respectively. As of December 31, 2015, total future minimum lease payments under non-cancelable operating
leases are U.S.$1.1 million in 2016, U.S.$0.9 million in 2017, U.S.$0.5 million in 2018 and U.S.$0.5 million in 2019. At December
31, 2015 there are no additional obligations after 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In February 2008, Republic entered into
an agreement with Integrys Energy Services (US Energy) which enables Republic to receive payments for allowing reduction of electricity
demands during identified time periods. The agreement was not renewed by Republic upon the annual expiration in May 31, 2012. Republic
recognized income of U.S.$ 2.4 million from this agreement in June 2012. Income was recognized after Republic fulfilled its performance
obligations under the terms of the agreement for the full twelve month period of the annual term. In January 2013, Republic entered
into a similar agreement with EnerNOC which enables Republic to receive payments for reducing the electricity consumption during
a dispatch declared by PJM Interconnection as an emergency. The agreement is for 5 years, effective January 31, 2013 and expires
on May 31, 2018. Republic recognized income of U.S.$ 3.2 million and of U.S.$ 2.0 million from this agreement in 2015 and in 2014,
respectively. Unlike the previous agreement, the payments are earned per event and accrued.</P>

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<TD></TD><TD><A NAME="a_Toc462142419"></A><A NAME="a_Toc323315311"></A><A NAME="a_Toc323310715"></A><A NAME="a_Toc323254053"></A><A NAME="a_Toc323253662"></A><A NAME="a_Toc323253338"></A><A NAME="a_Toc322026585"></A><A NAME="p66"></A>Item 6.&nbsp;&nbsp;&nbsp;&nbsp; Directors, Senior Management and Employees</TD></TR></TABLE>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in"></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc322026586"></A><A NAME="a_Toc322026144"></A><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"><A NAME="a_Toc322026587"></A><A NAME="a_Toc322026145"></A>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 five 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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in">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. In compliance with
our bylaws and applicable Mexican law, our board of directors meets on a quarterly basis and resolutions adopted by a majority
of directors at the meeting are valid resolutions.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026588"></A><A NAME="a_Toc322026146"></A>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 2016 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"><A NAME="a_Toc322026589"></A><A NAME="a_Toc322026147"></A>Authority
of the Board of Directors</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" 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 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 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>


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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>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"><A NAME="a_Toc322026590"></A><A NAME="a_Toc322026148"></A>Duty
of Care and Duty of Loyalty</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The Mexican Securities Market Law imposes
a duty of care and a duty of loyalty on directors. The duty of care requires our directors to act in good faith and in the best
interests of the company. In carrying out this duty, our directors are required to obtain the necessary information from the executive
officers, the external auditors or any other person to act in the best interests of the company. Our directors are liable for damages
and losses caused to us and our subsidiaries as a result of violating their duty of care.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The duty of loyalty requires our directors
to preserve the confidentiality of information received in connection with the performance of their duties and to abstain from
discussing or voting on matters in which they have a conflict of interest. In addition, the duty of loyalty is violated if a shareholder
or group of shareholders is knowingly favored or if, without the express approval of the board of directors, a director takes advantage
of a corporate opportunity. The duty of loyalty is also violated, among other things, by (i) failing to disclose to the audit and
corporate practices committee or the external auditors any irregularities that the director encounters in the performance of his
or her duties or (ii) disclosing information that is false or misleading or omitting to record any transaction in our records that
could affect our financial statements. Directors are liable for damages and losses caused to us and our subsidiaries for violations
of this duty of loyalty. This liability also extends to damages and losses caused as a result of benefits obtained by the director
or directors or third parties, as a result of actions of such directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our directors may be subject to criminal
penalties of up to 12 years&rsquo; imprisonment for certain illegal acts involving willful misconduct that result in losses to
us. Such acts include the alteration of financial statements and records.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Liability actions for damages and losses
resulting from the violation of the duty of care or the duty of loyalty may be exercised solely for our benefit and may be brought
by us, or by shareholders representing 5% or more of our capital stock, and criminal actions only may be brought by the Mexican
Ministry of Finance, after consulting with the CNBV. As a safe harbor for directors, the liabilities specified above (including
criminal liability) will not be applicable if the director acting in good faith (i) complied with applicable law, (ii) made the
decision based upon information provided by our executive officers or third-party experts, the capacity and credibility of which
could not be subject to reasonable doubt, (iii) selected the most adequate alternative in good faith or if the negative effects
of such decision could not have been foreseeable, and (iv) complied with shareholders&rsquo; resolutions provided the resolutions
do not violate applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The members of the board are liable to
our shareholders only for the loss of net worth suffered as a consequence of disloyal acts carried out in excess of their authority
or in violation of our by-laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In accordance with the Mexican Securities
Market Law, supervision of our management is entrusted to our board of directors, which shall act through an audit and corporate
practices committee for such purposes, and to our external auditor. The audit and corporate practices committee (together with
the board of directors) replaces the</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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">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">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. 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, and is the chairman of our Audit Committee. He has been the tax advisor of Industrias CH
since 1978 and our tax advisor since 2001 and also serves as 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 and has been a member of our board of directors
since 2011. 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. 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>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.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026591"></A><A NAME="a_Toc322026149"></A>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; margin-bottom: 12pt">
<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"><B>Position</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Held Since</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&#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">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&#9;&#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">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&#9;&#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">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&#9;&#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">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>


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<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 and has been a member of our board of directors
since 2011. 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 the general accountant within the
main subsidiaries of Grupo Simec. Previously<B><I> </I></B>Mr. Moreno worked 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"><A NAME="a_Toc322026592"></A><A NAME="a_Toc322026150"></A><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, 2015
and 2014, we paid no fees to our five directors, and the aggregate compensation our executive officers earned was approximately
Ps. 57.3 million and Ps. 30.3 million, respectively. We do not provide pension, retirement or similar benefits to our directors
in their capacity as directors. Our executive officers are eligible for retirement and severance benefits required by Mexican law
on the same terms as all other employees, and we do not separately set aside, accrue or determine the amount of our costs that
is attributable to executive officers.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc322026593"></A><A NAME="a_Toc322026151"></A><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"><A NAME="a_Toc322026594"></A><A NAME="a_Toc322026152"></A>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"><A NAME="a_Toc322026595"></A><A NAME="a_Toc322026153"></A>Audit
and Corporate Practices Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our audit and corporate practices committee
is governed by our bylaws and Mexican law. Our by-laws provide that the audit and corporate practices committee shall be at least
three members, all of which must be</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 6pt; margin-left: 0">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 was re-elected as chairman of the audit and
corporate practices committee at our annual ordinary shareholders&rsquo; meeting held on April 29, 2016, and Gerardo Arturo Avenda&ntilde;o
Guzm&aacute;n and Ra&uacute;l Arturo P&eacute;rez Trejo were re-elected as members. Rodolfo Garc&iacute;a G&oacute;mez de Parada
has been ratified 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our audit and corporate practices committee
met at least quarterly in 2015.</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"><A NAME="a_Toc322026596"></A><A NAME="a_Toc322026154"></A><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, 2015, we had 4,420
employees (2,688 were employed at our Mexico facilities, of whom 1,418 were unionized, 1,503 were employed at Republic facilities,
of whom 1,247 were unionized and 229 were employed at Brazil plant, of whom 135 were unionized) compared to 4,861 employees as
of December 31, 2014, (2,735 were employed at our Mexico facilities, of whom 1,450 were unionized, and 2,126 were employed at Republic
facilities, of whom 1,769 were unionized), and 5,117 employees as of December 31, 2013 (2,689 were employed at our Mexico facilities,
of whom 1,510 were unionized, and 2,428 were employed at Republic facilities, of whom 1,956 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 18, 2018.</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 May 16, 2017.</TD></TR></TABLE>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35.5pt">&nbsp;</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 16, 2018.</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 March 1, 2018.</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, the contract expires
on January 15, 2018; 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 contract expires on January 23, 2018.</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"><A NAME="a_Toc322026597"></A><A NAME="a_Toc322026155"></A>Collective
Bargaining Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As of December 31, 2015, 83% 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 53% of the employees
are under collective bargaining agreements, which expire as described above. For the Brazil operations, approximately 59% of the
employees are under collective bargaining agreements, which expire on December 31, 2016.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026598"></A><A NAME="a_Toc322026156"></A>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. While this plan provides defined benefits as a result of lack
of information, the company accounts for the plan as a defined contribution plan. Specifically, the plan does not maintain accounting
records for purposes of IFRS also not enough to allocate amounts between participating employers&rsquo; information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">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;The company contributions to this plan in each of the years
ended December 31, 2015 and 2014 amounted to U.S.$5.3 million and U.S.$5.8 million, respectively.</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in">- Contributions to the SPT by the company may be used
to provide benefits to employees of other participating employers;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in">- If a participating employer stops contributing to
the SPT, the unfunded obligations of the plan may be borne by the remaining participating employers;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in">- If Republic 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Currently there are no agreements regarding
the allocation of a deficit or surplus in the plan itself or the withdrawal of the company's plan.</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">A pension plan generally will be considered
in a state of &quot;endangered&quot; if at the beginning of the plan year the funded percentage of the plan is less than 80 percent
or in &quot;critical&quot; if the percentage is less than 65 percent. If a pension plan enters endangered status, it requires plan
administrators to adopt a funding improvement plan. Similarly, if a pension plan enters critical status, it requires plan administrators
to adopt a rehabilitation plan. Republic's plan was neither endangered nor critical status for the years ended December 31, 2015
and 2014.</P>

<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, 2015 and 2014, is outlined in the table below.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B>Pension Protection Act Zone Status<SUP>(a)</SUP> </B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Republic Steel Contributions</B></P>
        <P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center; text-indent: 0in"><B>(U.S.$ in thousands)</B></P></TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B>Surcharge Imposed<SUP>(c)</SUP></B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; font-size: 8pt; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B>Pension <U><BR>
Fund</U></B></FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B>EIN/ Pension <U><BR>
Plan Number</U></B></FONT></TD>
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B><U>2015</U></B></FONT></TD>
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B><U>2014</U></B></FONT></TD>
    <TD STYLE="width: 13%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B>FIP/RP Status Pending/ <U>Implemented<SUP>(b)</SUP> </U></B></FONT></TD>
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B><U>2015</U></B></FONT></TD>
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B><U>2014</U></B></FONT></TD>
    <TD STYLE="width: 6%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B><U>2015</U></B></FONT></TD>
    <TD STYLE="width: 6%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B><U>2014</U></B></FONT></TD>
    <TD STYLE="width: 22%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt"><B>Expiration of<BR>
 Collective<BR>
Bargaining<BR>
<U>Agreement</U></B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">Steelworkers Pension Trust</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">23-6648508/499</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">Green</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">Green</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">No</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: right; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">$5,326</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: right; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">$5,738</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">No</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">No</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 8pt; text-indent: 0in"><FONT STYLE="font-size: 8pt">August 15, 2016</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: 17.85pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-size: 8pt">(a)</FONT></TD><TD><FONT STYLE="font-size: 8pt">The zone status is based on information that Republic received from the plan and is certified
by the plan&rsquo;s actuary. Among other factors: plans in the green zone are at least 80% funded, plans in the yellow zone are
less than 80% funded, and plans in the red zone are less than 65% funded.</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: 17.85pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-size: 8pt">(b)</FONT></TD><TD><FONT STYLE="font-size: 8pt">Indicates if a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending
or has been implemented.</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: 17.85pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-size: 8pt">(c)</FONT></TD><TD><FONT STYLE="font-size: 8pt">Indicates whether there were charges to Republic from the plan.</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; text-indent: 35.45pt">Republic 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 0 12pt; text-indent: 35.45pt">There have been no significant changes
that affect the comparability of 2015 and 2014 contributions.</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">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&nbsp;31, 2015 and 2014, the company recorded expenses of U.S.$10.4 million and U.S.$10.4 million, respectively,
related to this welfare 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">Republic recorded combined expenses of U.S.$15.7
million and U.S.$16.7 million for the years ended December&nbsp;31, 2015 and 2014, 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">&nbsp;</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 </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">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 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, 2015 and 2014, the company recorded expense
of U.S.$1.7&nbsp;million and U.S.$2.3&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 0 12pt; 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"><A NAME="a_Toc322026599"></A><A NAME="a_Toc322026157"></A>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&#45;tax income, as defined in the labor agreement. At
the end of each year, the contribution is based upon annual pre&#45;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. No expense was recorded under this plan during the years ended December 31, 2015 and 2014.</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. During 2012, the profit sharing plan was based upon achieving target Earnings Before Interest,
Taxes, Depreciation, and Amortization (EBITDA) amounts. During 2015 and 2014, the profit sharing plan was based upon achieving
certain inventory and shipment targets. During the year ended December 31, 2015, Republic did not record payments to employees
under the profit sharing plan. During the year ended December 31, 2014, Republic paid $ $0.1 million to employees covered by the
profit sharing plans.</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"><A NAME="a_Toc322026601"></A><A NAME="a_Toc322026159"></A><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 June 30, 2016, Rufino Vigil Gonz&aacute;lez, the chairman
of our board of directors, owned, directly or indirectly, approximately 67% of Industrias CH.</P>

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><A NAME="a_Toc462142420"></A><A NAME="a_Toc323315312"></A><A NAME="a_Toc323310716"></A><A NAME="a_Toc323254054"></A><A NAME="a_Toc323253663"></A><A NAME="a_Toc323253339"></A><A NAME="a_Toc322026602"></A><A NAME="p73"></A>Item
7. Major Shareholders and Related Party Transactions</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"><A NAME="a_Toc322026603"></A><A NAME="a_Toc322026161"></A><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 June 30, 2016, we had 484,918,595
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. At June 30, 2016, Rufino Vigil Gonz&aacute;lez, the chairman
of our board of directors, owned, directly or indirectly, approximately 67% of Industrias CH.<SUP> </SUP></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>


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<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 June 30, 2016.</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: 62%; 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 of Shareholder </B></P></TD>
    <TD STYLE="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; 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>Number
        of shares<BR>
        owned</B></P></TD>
    <TD STYLE="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; 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>% of shares<BR>
        owned</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; 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">Industrias CH, S.A.B. de C.V&#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">&#9;275,369,337</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;55.3%</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">Tuber&iacute;as Procarsa, S.A. de C.V. <SUP>(1)</SUP>&#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">&#9;99,461,866</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;20.0%</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">Vigon Control, S.R.L. de C.V.<SUP>(2)</SUP>&#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">&#9;31,048,736</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;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">Aceros y Laminados Sigosa, S.A. de C.V. <SUP>(1)</SUP>&#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">&#9;4,377,776</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;0.9%</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">Joist Estructuras S.A. de C.V. <SUP>(2)</SUP>&#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">&#9;6,188,406</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;1.2%</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">Industrial de Herramientas CH, S.A. de C.V. <SUP>(2)</SUP>&#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">&#9;2,240,628</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;0.5%</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">Public Investors <SUP>(3)</SUP>&#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">&#9;66,231,846</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;13.3%</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">Treasury Shares&#9;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 8.1pt; border-bottom: Black 0.5pt solid; text-align: right">12,790,619</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 8.1pt; border-bottom: Black 0.5pt solid; text-align: right">2.6%</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">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 8.1pt; border-bottom: Black 0.5pt solid; text-align: right">497,709,214</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 8.1pt; border-bottom: Black 0.5pt solid; text-align: right">100%</P></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: 0"><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: 0"><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. In 2013, Proyectos Comerciales el Ninzi, S.A. de C.V.
and Compa&ntilde;&iacute;a Mexicana de Tubos, S.A. de C.V. effected a split and subsequent merger therefore transferring their
shares in the company to Vigon Control, S. de R.L de C.V.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Includes 5,281,419 shares owned by Companies directly or indirectly owned by members of the Vigil family.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc322026604"></A><A NAME="a_Toc322026162"></A>At
June 30, 2016, 484,918,595 series B common shares were held in Mexico by approximately 233 shareholders who were record holders
in Mexico and 16 were ADS record holders in the United States. The ADS represent 3,377,427 common shares.<SUP> </SUP></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 18 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 at the exchange rate at that time) 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 2011, these sales totaled Ps. 31 million, in 2012 these sales totaled
Ps. 181 million, in 2013 these sales totaled Ps. 83 million, in 2014 these sales totaled Ps. 4 million and in 2015 these sales
totaled Ps. 224 million. In addition, in 2011, 2112, 2013, 2014, and 2015 we purchased Ps. 66 million, Ps. 113 million, Ps. 30
million, Ps. 18 million and Ps. 7 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 2011 we paid Ps. 14 million, in 2012 we
paid Ps. 16 million, in 2013 we paid Ps. 16 million, in 2014 we paid Ps. 21 million and in 2015 we paid Ps. 22 million</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In 2015 we paid royalties to Industrias
CH for the use of certain brands in an amount of Ps. 183 million, in 2014 and prior years no such payments were made.</P>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc322026605"></A><A NAME="a_Toc322026163"></A><FONT STYLE="color: #010000">C.</FONT></TD><TD>Interests of Experts and Counsel</TD></TR></TABLE>

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

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><A NAME="a_Toc462142421"></A><A NAME="a_Toc323315313"></A><A NAME="a_Toc323310717"></A><A NAME="a_Toc323254055"></A><A NAME="a_Toc323253664"></A><A NAME="a_Toc323253340"></A><A NAME="a_Toc322026606"></A><A NAME="p75"></A>Item&nbsp;8. Financial Information</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"><A NAME="a_Toc322026607"></A><A NAME="a_Toc322026165"></A><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"><A NAME="a_Toc322026608"></A><A NAME="a_Toc322026166"></A>Legal
Proceedings</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026609"></A><A NAME="a_Toc322026167"></A>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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The tax authorities in Mexico have the
right to review the previous five years and could determine differences in taxes payable, plus corresponding adjustments, surcharges
and fines. Currently the authority is reviewing certain of our subsidiaries, however its review is not yet completed.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026610"></A><A NAME="a_Toc322026168"></A>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; background-color: white"><B>California Regional Water Control Board,
CRWCB</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><FONT STYLE="background-color: white"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in; background-color: white">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,
2015, 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 Control Laws and the State of California Security
Code and imposed an 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 U.S.$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, 2015 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"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The land remediation was suspended at
the beginning of 2011 due to the inefficiency of the process, which was verified with several studies, so as an alternative, once
permits from the competent authorities in Mexico were obtained, in November 2011, the Mexicali plant began the process of importing
raw land for final disposal in a secure landfill based in Nuevo Le&oacute;n, after the metal content is separated, which metal
content is used as raw material in the smelting process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">The daily load of 5 trucks of land in
PS is made in the presence of DTSC staff. At December 31, 2014, PS had already shipped 27,800 tons of material to the Mexicali
plant. To date, only a pile estimated at 8,000 tons of material is still pending to be shipped, such pile is classified as RCRA
(dangerous for Federal purposes). PS is in the process of obtaining the permits to ship this type of material with the Mexican
authorities. The process began in early 2013, but the response from the authorities has been slow, however, to date the authorities
have not granted the relevant permits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 9, 2015 we received a letter
from the Attorney General / Department of Justice of the State of California where PS is required to present a program for transporting
contaminated soil stack classified as RCRA to an authorized confinement in the United States on or before April 22, 2015. The program
must include plans to carry out the remaining shipments no later than July 9, 2015. The authority warned that if PS fails to comply,
the DTSC will immediately proceed with a civil lawsuit seeking the maximum amount of fines established by law and relevant judicial
redress.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On April 21, 2015, PS send a letter to
the Attorney General explaining that contrary to what the letter says, the authorities in Mexico have not denied permission to
PS but have simply requested that a separate application format be submitted, such was submitted and received by the authorities
on April 17, 2015 and is expected to be approved in a maximum of 60 days. PS have requested the authority to grant an extension
on the obligation to ship proceeds to confinement in the United States, pending obtaining the necessary permits in Mexico. PS is
uncertain whether the authority will accept this proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Based on the experience of shipments
in 2013, 2014 and 2015, we believe that the cost of shipping the remaining piles would result in a total of between U.S.$0.3 million
and U.S.$0.5 million. At December 31, 2015, we have created a reserve for U.S.$0.4 million under the heading of other payables
in our consolidated statement of financial position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">On January 5, 2016, the San Diego Superior
Court entered into a final judgement (the &ldquo;2016 Final Judgment&rdquo;) between the California Attorney General's office,
the DTSC and PS. The agreements are 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>PS must pay U.S.$138,000 as civil penalties for violations of the California Hazardous Waste Control Law (the &quot;HWCL&quot;)
between 2010 and 2015. PS has made payments of U.S.$84,000 to date, with the balance to be paid under the terms established in
the 2016 Final Judgment.</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>PS agreed to remove a soil pile that qualified as being hazardous under the RCRA to a Class I landfill in Buttonwillow, California.
The 2016 Final Judgment indicates that PS completed this task in October 2, 2015.</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>Under the terms of the 2016 Final Judgment, PS was also required to take confirmation soil samples in the vicinity of the area
previously occupied by the RCRA soil pile. That soil sampling indicated the presence of soil with levels of contaminants that qualify
as hazardous under the California HWCL. The sampling did not indicate the presence of any soil with levels of contaminants that
quality as hazardous under RCRA. On April 7, 2016, the California Attorney General and DTSC demanded that PS remove soil within
10 feet of the former RCRA pile to two feet below ground surface and dispose of that soil in an appropriate landfill. At this time,
we have no information as to the ultimate scope of this soil removal or how much this soil removal may cost.</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>PS must continue to comply with the Final Judgment, 2004 Consent Agreement, Interim Measures Workplan, and all other workplans.
The DTSC requested and PS confirmed that it will prepare a</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 1in">feasibility investigation and risk assessment on or before
September 15, 2016, as a precursor for preparing a Corrective Measures Study. The Corrective Measures Study is intended to describe
the environmental, soil, and groundwater investigation results, and recommended options for addressing existing conditions at PS&rsquo;s
facility in National City. At this time, we have no information as to what these reports will determine, the remedies that may
be suggested, or how much these remedies may cost.</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,
2015 and 2014, we had a reserve to cover probable environmental liabilities totaling U.S.$2.9 and U.S.$2.8 million, respectively.
The reserve includes incremental direct costs of remediation efforts and post remediation monitoring costs that are expected to
be included after corrective actions are complete. As of December 31, 2015, the current and non-current portions, U.S.$1.2 million
and U.S.$1.7 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"><A NAME="a_Toc322026611"></A><A NAME="a_Toc322026169"></A><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"><A NAME="a_Toc322026612"></A><A NAME="a_Toc322026170"></A>None</P>

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><A NAME="a_Toc462142422"></A><A NAME="a_Toc323315314"></A><A NAME="a_Toc323310718"></A><A NAME="a_Toc323254056"></A><A NAME="a_Toc323253665"></A><A NAME="a_Toc323253341"></A><A NAME="a_Toc322026613"></A><A NAME="p76"></A>Item
9. The Offer and Listing</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our series B shares are listed on the
Mexican Stock Exchange, and the ADSs are listed on the New York Stock Exchange. On February 20, 2003, we effected a 1 for 20 reverse
stock split. On May 30, 2006, we effected a 3 for 1 stock split. To maintain trading prices in the United States, the ADS to share
ratio was simultaneously adjusted from one ADS representing one series B share to one ADS representing three Series B shares. The
ADSs are evidenced by American depositary receipts, or &ldquo;ADRs,&rdquo; issued by The Bank of New York as depositary under a
Deposit Agreement, dated as of July 8, 1993, as amended, among us, the depositary and the holders from time to time of ADRs.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026614"></A><A NAME="a_Toc322026172"></A>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 STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3">
        <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>&nbsp;</TD>
    <TD COLSPAN="3">
        <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: 58%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 9%; 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>High</B></P></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%; 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>Low</B></P></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%; 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>High</B></P></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%; 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>Low</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2011</B>&#9;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">35.00</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">25.16</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;8.85</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;5.53</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2012</B>&#9;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">61.99</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">31.00</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.39</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;6.96</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2013</B>&#9;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">64.62</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">45.54</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.37</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><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"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2014</B>&#9;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">66.99</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">42.13</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.17</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;8.50</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>2015</B>&#9;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">50.63</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">35.21</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;9.98</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;6.15</FONT></TD></TR>
</TABLE>

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

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

<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="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3"><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>&nbsp;</TD>
    <TD COLSPAN="3"><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: 58%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 9%"><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: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%"><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: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%"><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: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%"><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"><B>2013</B></TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; 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">First Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">64.62</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">51.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">15.37</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.15</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Second Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">59.89</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">50.56</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">14.54</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">11.31</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Third Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">57.60</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">45.66</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">13.49</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.23</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Fourth Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">55.63</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">45.54</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">12.89</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.39</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><B>2014</B></TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; 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">First Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">57.07</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">47.33</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">12.86</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.67</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Second Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">63.49</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">47.22</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">14.31</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.84</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Third Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">66.99</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">56.90</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">15.17</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">12.77</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Fourth Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">61.50</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">42.13</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">13.66</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">8.50</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><B>2015</B></TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; 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">First Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">50.63</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">40.05</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.98</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">7.84</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Second Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">50.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">41.07</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.69</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">7.77</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Third Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">49.30</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">41.47</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.14</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">7.26</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">Fourth Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">47.98</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">35.21</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">8.89</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.15</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><B>2016</B></TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; 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">First Quarter&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">47.50</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">35.65</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">8.23</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">5.93</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">Second Quarter&#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">59.50<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">45.90<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.26</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.97</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">Third Quarter (through September 16) &#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">60.98<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">45.12<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.59</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.53</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt"><B>2016</B></TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; 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">January&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">40.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">35.65</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.59</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">5.93</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">February&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">42.99</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">37.15</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">7.05</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">5.97</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">March&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">47.50</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">40.80</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">8.23</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.88</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0.1in">April&#9;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">57.76</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">45.90</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 14pt; padding-left: 5.4pt; text-align: right">7.54</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">May&#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">59.50<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">53.31<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">10.26</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">8.60</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">June&#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;<SUP> (1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;<SUP> (1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.10</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.97</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">July&#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;<SUP> (1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&mdash;<SUP> (1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">7.50</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.59</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">August&#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">58.56<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">45.12<SUP>(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.43</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">6.53</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 0.1in">September (through September 16)&#9;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">60.98</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">57.51</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">9.59</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 14pt; padding-left: 5.4pt; text-align: right">8.86</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: 0in"><FONT STYLE="color: #010000">(1)<FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: windowtext">Since May 30, 2016, the Mexican Stock Exchange announced the suspension in the trading
of our stock on the Mexican Stock Exchange, identified with the ticker symbol &ldquo;SIMEC B&rdquo; given our failure to timely
file our 2015 annual report and audited financial statements. We filed our annual report on August 12, 2016 with the Mexican Banking
and Securities Commission, the suspension has been lifted and our stock is trading normally again on the Mexican Stock Exchange
since August 15, 2016. </FONT></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>


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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 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">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>

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0.12in"><A NAME="a_Toc462142423"></A><A NAME="a_Toc323315315"></A><A NAME="a_Toc323310719"></A><A NAME="a_Toc323254057"></A><A NAME="a_Toc323253666"></A><A NAME="a_Toc323253342"></A><A NAME="a_Toc322026615"></A><A NAME="p78"></A>Item
10.<FONT STYLE="font: 8pt Times New Roman, Times, Serif"> </FONT> Additional Information</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"><A NAME="a_Toc322026616"></A><A NAME="a_Toc322026174"></A><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"><A NAME="a_Toc322026617"></A><A NAME="a_Toc322026175"></A><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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0.12in">property of the issuer for their own benefit or that of third parties
in contravention of relevant policies; (vii) if they make undue use of privileged information; or (viii) if, for themselves or
third parties, they take advantage of a corporate opportunity. A violation of the duty of loyalty makes the relevant directors
jointly and severally liable for damages and losses caused to the issuer and its subsidiaries, and in every case require removal
from their positions. Unlike the duty of care, liability for breach of the duty of loyalty may not be limited by the company&rsquo;s
by-laws, by resolution of the shareholders&rsquo; meeting or otherwise, nor may indemnification provisions or insurance policies
cover such liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Our directors may be subject to criminal
penalties of up to 12 years&rsquo; imprisonment for certain illegal acts involving willful misconduct that result in losses to
us, which include, among others, altering financial statements or records. In terms of the General Law of Commercial Companies
and our by-laws, only the shareholders&rsquo; meetings can determinate compensation for the directors. Our directors cannot individually
exercise any of our borrowing 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"><A NAME="a_Toc322026618"></A><A NAME="a_Toc322026176"></A>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,</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">in addition to those matters described above, will have to
approve any transaction representing 20% or more of our consolidated assets, executed in a single or a series of transactions,
during any fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Extraordinary shareholders&rsquo; meetings
are those called to consider any of the following matters:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" 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"><A NAME="a_Toc322026619"></A><A NAME="a_Toc322026177"></A>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"><A NAME="a_Toc322026620"></A><A NAME="a_Toc322026178"></A>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"><A NAME="a_Toc322026621"></A><A NAME="a_Toc322026179"></A>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"><A NAME="a_Toc322026622"></A><A NAME="a_Toc322026180"></A>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 at 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>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026623"></A><A NAME="a_Toc322026181"></A>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"><A NAME="a_Toc322026624"></A><A NAME="a_Toc322026182"></A>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.<BR>
No shareholder consent is required for such purchases.</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 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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In our Ordinary Shareholders Meeting
held on April 8, 2013, an increase in the reserve for repurchase of shares to Ps. 1,000 million was approved. In 2013, we repurchased
20,995,846 shares, of which 16,574,828 we resold. At December 31, 2013, we had 4,421,018 treasury shares. In 2014, we repurchased
50,465,224 shares, of which 49,666,448 we resold. At December 31, 2014, we had 5,219,794 treasury shares. In 2015, we repurchased
63,697,541 shares, of which 57,450,890 we resold. At December 31, 2015, we had 11,466,445 treasury shares.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026625"></A><A NAME="a_Toc322026183"></A>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"><A NAME="a_Toc322026626"></A><A NAME="a_Toc322026184"></A>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"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026627"></A><A NAME="a_Toc322026185"></A>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>

<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 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 </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026628"></A><A NAME="a_Toc322026186"></A>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; text-indent: 0.5in"><A NAME="a_Toc322026629"></A><A NAME="a_Toc322026187"></A>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. One alternate director may be appointed for each principal director, provided that the alternates for the
independent directors are also deemed independent. Under Mexican law, certain individuals, including insiders, controlling individuals,
major clients and suppliers, and any relatives of such individuals, are per se deemed as non-independent. In addition, under Mexica
law, the determination as to the independence of our directors made by our shareholders&rsquo; meeting may be contested by the
CNBV. The independent directors are required under our bylaws to meet as often as necessary to fulfill their responsibilities.
Independent directors are not required under Mexican law or our bylaws to meet without the presence of non-independent directors
and management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the rules and regulations
of the 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. Further, independent
directors are required meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually
in executive session without the presence of non-independent directors and management.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">For differences among Mexican Securities
Market Law, which apply to us, and laws generally applicable to U.S. corporations regarding audit-committees, see &ldquo;Item 6.
Directors, Senior Management and Employees&mdash;C. Board Practices&mdash;Committees&mdash;Audit and Corporate Practices Committee.&rdquo;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc322026630"></A><A NAME="a_Toc322026188"></A>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 </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026631"></A><A NAME="a_Toc322026189"></A>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 84% of the voting stock of the corporation, excluding shares held by directors, officers, and employee stock plans;
or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" 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>/3% of the voting
stock which is not owned by the interested shareholder.</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc322026632"></A><A NAME="a_Toc322026190"></A>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>


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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc322026633"></A><A NAME="a_Toc322026191"></A>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"><A NAME="a_Toc322026634"></A><A NAME="a_Toc322026192"></A>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"><A NAME="a_Toc322026635"></A><A NAME="a_Toc322026193"></A>Cumulative
Voting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, cumulative voting
for the election of directors is permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Delaware law, cumulative voting
for the election of directors is permitted if expressly authorized in the certificate of incorporation.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc322026636"></A><A NAME="a_Toc322026194"></A>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"><A NAME="a_Toc322026637"></A><A NAME="a_Toc322026195"></A>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"><A NAME="a_Toc322026638"></A><A NAME="a_Toc322026196"></A>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"><A NAME="a_Toc322026639"></A><A NAME="a_Toc322026197"></A>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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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"><A NAME="a_Toc322026640"></A><A NAME="a_Toc322026198"></A><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"><A NAME="a_Toc322026641"></A><A NAME="a_Toc322026199"></A>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"><A NAME="a_Toc322026642"></A><A NAME="a_Toc322026200"></A><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"><A NAME="a_Toc322026643"></A><A NAME="a_Toc322026201"></A><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"><A NAME="a_Toc322026650"></A><A NAME="a_Toc322026208"></A>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 &ldquo;non-Mexican holder&rdquo; (as defined below) that is an individual
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 (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 an owner of 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 the effects of the U.S. Medicare tax on net
investment income, or any U.S. or Mexican state or local tax considerations that may be relevant to U.S. holders. This summary
also does not address U.S. federal income tax consequences applicable to U.S. holders that are subject to special tax rules, such
as banks, securities or currency dealers, traders in securities that mark their securities to market, insurance companies, tax-exempt
entities, persons liable for the alternative minimum tax, 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 other pass-through entities
for U.S. federal income tax purposes. If a partnership (or other pass-through entity for U.S. federal income tax purposes) 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 of series B shares or ADSs 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>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 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"><A NAME="a_Toc322026644"></A><A NAME="a_Toc322026202"></A>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 (including
the 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 2016.
The corporate-level dividend tax on the distribution of earnings is not final and may be credited against income tax payable during
the fiscal year in which the dividend tax was paid and for the following two years. Dividends paid from distributable earnings,
after corporate income tax has been paid with respect to these earnings, are not subject to this corporate-level dividend tax.
Currently, 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 2016, 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"><A NAME="a_Toc322026645"></A><A NAME="a_Toc322026203"></A>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 or the ADSs (including any amounts withheld for Mexican taxes), 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 U.S. holder, in the case of series B shares, or the depositary, in the case of ADSs. Such dividends 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
non-corporate U.S. holders (including individuals) with respect to the series B shares and ADSs will be subject to taxation at
a maximum rate of 20% if the dividends are &ldquo;qualified dividends.&rdquo; Dividends paid on the series B shares and ADSs will
generally be treated as qualified dividends if (A) 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;) and (B) (i) we are
eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service has approved
for the purposes of the qualified dividend rules or (ii) the series B shares or ADSs, as applicable, are readily tradable on an
established securities market in the United</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">States. The Tax Treaty has been approved for the purposes
of the qualified dividend rules and we believe that we are eligible for the benefits of the Tax Treaty. Further, as discussed below,
we do not believe that we are a PFIC. Therefore, we believe that dividends paid to a non-corporate U.S. holder with respect to
the series B shares and ADSs will generally be treated as qualified dividends. U.S. holders should consult their own tax advisors
in this regard in light of their particular circumstances.</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 for a taxable year, it generally will first be treated as a non-taxable return
of basis to the extent thereof, and thereafter as capital gain from the sale of the series B shares or ADSs. However, 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 such U.S. holder, in the case of series B shares, or by the depositary, in the case of
ADSs, whether or not they are converted into U.S. dollars. If the pesos received as a dividend are converted into U.S. dollars
on the date they are received, a U.S. holder generally will not be required to recognize foreign currency gain or loss in respect
of the dividend income. If the pesos received as a dividend are not converted into U.S. dollars on the date of receipt, you will
have a basis in the pesos equal to their United States dollar value on the date of receipt. 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Subject to certain conditions and limitations
(including a minimum holding period requirement), Mexican withholding taxes on dividends, if any, may be treated as foreign taxes
eligible for credit against a U.S. holder&rsquo;s U.S. federal income tax liability. 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 or 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"><A NAME="a_Toc322026646"></A><A NAME="a_Toc322026204"></A>Taxation
of Dispositions of Shares or ADSs</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Gain on the sale or other disposition
of ADSs by a U.S. holder will generally not be subject to Mexican tax. Deposits and withdrawals of series B shares in exchange
for ADSs will not give rise to Mexican tax or transfer duties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Gain on the sale of series B shares by
a U.S. holder will not be subject to any Mexican tax if the transaction is carried out through the Mexican Stock Exchange or other
stock exchange or securities markets approved by the Mexican Ministry of Finance and Public Credit. Gain on sales or other dispositions
of series B shares made in other circumstances generally would be subject to Mexican tax at a rate of 30% for 2016 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 treaty benefits.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc322026647"></A><A NAME="a_Toc322026205"></A>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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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 non-corporate U.S. holder (including individuals) generally
is subject to a maximum federal income tax rate of 20%. 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 into U.S. dollars 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"><A NAME="a_Toc322026648"></A><A NAME="a_Toc322026206"></A>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"><A NAME="a_Toc322026649"></A><A NAME="a_Toc322026207"></A>Passive
Foreign Investment Company</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">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 2015 taxable year, and we expect to operate in such a manner so as to not become a PFIC. If, however, we are or
become a PFIC, a U.S. holder could be subject to additional U.S. federal income taxes on gain recognized with respect to the series
B shares or ADSs and on certain distributions, plus an interest charge on certain taxes treated as having been deferred under the
PFIC rules.</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 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 that are paid to such U.S. holder within the United States (and
in certain cases, outside the United States), unless such U.S. holder is an exempt recipient. 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 and may entitle the U.S. holder to a refund, 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"><A NAME="a_Toc322026651"></A><A NAME="a_Toc322026209"></A><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"><A NAME="a_Toc322026652"></A><A NAME="a_Toc322026210"></A>Not
applicable</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_Toc322026653"></A><A NAME="a_Toc322026211"></A>&nbsp;</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">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"><A NAME="a_Toc322026654"></A><A NAME="a_Toc322026212"></A><FONT STYLE="color: #010000">I.</FONT></TD><TD>Subsidiary Information</TD></TR></TABLE>

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

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><A NAME="a_Toc462142424"></A><A NAME="a_Toc323315316"></A><A NAME="a_Toc323310720"></A><A NAME="a_Toc323254058"></A><A NAME="a_Toc323253667"></A><A NAME="a_Toc323253343"></A><A NAME="a_Toc322026655"></A><A NAME="p92"></A>Item
11. Quantitative and Qualitative Disclosures About Market Risk</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We are exposed to market risk, which
is the potential risk of loss in fair values, cash flows or earnings due to changes in interest rates and foreign currency rates
(primarily the peso/dollar exchange rate), as a result of our holdings of financial instrument positions. Our financial instruments
include cash and cash equivalents, trade and other accounts receivable, accounts payable, long-term debt securities and related
party debt. We do not maintain a trading portfolio. Our borrowings are entirely denominated in U.S. dollars. We do not utilize
derivative financial instruments to manage our market risks with respect to our financial instruments. Historically, based on the
last ten years of data, inflation in Mexico has been 22% lower 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. At December 31, 2015 and 2014 we did not have natural gas cash-flow exchange contracts or swaps.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026656"></A><A NAME="a_Toc322026214"></A>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, 2015 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 </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">exchange rate would not have a material adverse effect on our earnings. Because there is
no active trading market for our debt instruments, we are not able to determine the impact of these changes on the fair value
of those debt instruments. The sections below describe our exposure to interest rates and currency rates including the impact
of changes in these rates on our earnings.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026657"></A><A NAME="a_Toc322026215"></A>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"><A NAME="a_Toc322026658"></A><A NAME="a_Toc322026216"></A>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. 87.2 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, 2015 and assuming that the hypothetical market rate changes selected by us
in our market risk analysis occur during 2016. The sensitivity analysis does not give effect to the impact of inflation on its
exposure to increases in interest rates or the decline in the peso/dollar exchange rate.</P>

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0.18in"><A NAME="a_Toc462142425"></A><A NAME="a_Toc323315317"></A><A NAME="a_Toc323310721"></A><A NAME="a_Toc323254059"></A><A NAME="a_Toc323253668"></A><A NAME="a_Toc323253344"></A><A NAME="a_Toc322026659"></A><A NAME="p93"></A>Item
12.<FONT STYLE="font: 8pt Times New Roman, Times, Serif"> </FONT>Description of Securities Other than Equity Securities</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"><A NAME="a_Toc322026660"></A><A NAME="a_Toc322026218"></A><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"><A NAME="a_Toc322026661"></A><A NAME="a_Toc322026219"></A><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"><A NAME="a_Toc322026662"></A><A NAME="a_Toc322026220"></A>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"><A NAME="a_Toc322026663"></A><A NAME="a_Toc322026221"></A><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"><A NAME="a_Toc322026664"></A><A NAME="a_Toc322026222"></A>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"><A NAME="a_Toc322026665"></A><A NAME="a_Toc322026223"></A><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"><A NAME="a_Toc322026666"></A><A NAME="a_Toc322026224"></A>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>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">ADS holders are also required to pay
additional fees for certain services provided by the depositary, as set forth in the table below.</P>




<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 58%; border-top: Black 1pt solid; border-bottom: Black 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: Black 1pt solid; border-bottom: Black 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: Black 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: Black 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Up to U.S.$ 5.00 per 100 ADSs (or portion thereof) </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 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: Black 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Up to U.S.$ 5.00 per 100 ADSs (or portion thereof)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 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: Black 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: Black 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: Black 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: Black 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: Black 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.$0.02 or less per ADS</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depositary services</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding: 1.45pt 5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.$0.02 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"><A NAME="a_Toc322026667"></A><A NAME="a_Toc322026225"></A>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 2015, 2014 or 2013.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc322026668"></A><A NAME="a_Toc322026226"></A>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_Toc323253268"></A><A NAME="a_Toc323253345"></A><A NAME="a_Toc323253669"></A><A NAME="a_Toc323254060"></A><A NAME="a_Toc323310655"></A><A NAME="a_Toc323310722"></A><A NAME="a_Toc323310765"></A><A NAME="a_Toc323315318"></A><A NAME="a_Toc462142426"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; color: #010000"><B>PART
II</B></FONT>&nbsp;</P>

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0.12in"><A NAME="a_Toc462142427"></A><A NAME="a_Toc323315319"></A><A NAME="a_Toc323310723"></A><A NAME="a_Toc323254061"></A><A NAME="a_Toc323253670"></A><A NAME="a_Toc323253346"></A><A NAME="a_Toc322026670"></A><A NAME="p94"></A>Item
13. Defaults, Dividends Arrearages and Delinquencies</P>

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

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<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0.12in"><A NAME="a_Toc462142428"></A><A NAME="a_Toc323315320"></A><A NAME="a_Toc323310724"></A><A NAME="a_Toc323254062"></A><A NAME="a_Toc323253671"></A><A NAME="a_Toc323253347"></A><A NAME="a_Toc322026671"></A><A NAME="p95"></A>Item
14.<FONT STYLE="font: 8pt Times New Roman, Times, Serif"> </FONT>Material Modifications to the Rights of Security Holders and
Use of Proceeds</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-top: 0pt; margin-bottom: 0.18in"> <A NAME="a_Toc462142429"></A><A NAME="a_Toc323315321"></A><A NAME="a_Toc323310725"></A><A NAME="a_Toc323254063"></A><A NAME="a_Toc323253672"></A><A NAME="a_Toc323253348"></A><A NAME="a_Toc322026672"></A><A NAME="p95a"></A><FONT STYLE="color: #010000">Item</FONT> <FONT STYLE="color: #010000">15.<FONT STYLE="font: 8pt Times New Roman, Times, Serif"> </FONT></FONT>Controls and Procedures</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"><A NAME="a_Toc322026673"></A><A NAME="a_Toc322026231"></A><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, 2015 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 did not assess the effectiveness
of our internal control over financial reporting as of December 31, 2015, because our internal audit department did not carry out
the functions necessary to analyze our internal controls during 2015; however, our management considers that the deficiencies found
in 2014 still persist, and therefore it has determined that our internal controls over financing reporting were not effective as
of December 31, 2015. Based on the evaluation of the effectiveness of our internal controls made by our external auditors, which
was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 1992)
in Internal Control &ndash; Integrated Framework, the following material weaknesses in our internal control over financial reporting
have been identified:</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&rsquo;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&rsquo;s annual or interim financial statements will not be prevented
or detected on a timely basis.</P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2013</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, 2013, the following material
weaknesses were identified:</FONT>&nbsp;</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) inadequate controls in the review and approval process of the disclosures of the financial
statements and our annual report on form 20-F, (ii) out of date whistleblower line for the Mexican subsidiaries, (iii) ineffective
controls in our patents registry, (iv) inadequate distribution and segregation of duties within the accounting department in the
Mexican subsidiaries, (v) deficient distribution to employees and officers of our code of ethics and poor promotion of strong control
environment and internal controls, (vi) failure to integrate all control processes into an Enterprise Resource Planning (ERP) system,
(vii) lack of an accounting manual with accounting instructions for our most important transactions, (viii) lack of specific procedures
to authorize and register intercompany transactions, (ix) failure to create and implement a complete training plan for our management
personnel preparing financial records, (x) limited IFRS and consolidation process understanding and reduced personnel within the
internal audit department which limited the scope of the management assessment, also the internal audit plan was not carried out
in full and did not include test about risk assessment, environmental, fraud and compliance with law, and only included a limited
review of the consolidated financial statements, (xi) lack of committees to review and approve all our contracts and to make risk
assessments, these activities are currently executed by selected persons only, (xii) lack of a transition plan for the establishment
of the new COSO 2013; and (xiii) insufficient resources to implement and follow up on the remedial measures in the Mexican subsidiaries
from previous years due to the prevalence of such deficiencies, and informal communication of deficiencies and remediation plans;</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, assets valuation and deferred taxes, 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 authorization, control and accounting of capitalized expenditures
and related fixed assets, 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) incomplete procedures for the reviewing process over
financial closings; (ii) incomplete documental support for authorization and extension of customer credit lines, (iii) deficient
controls in the control access to the information systems, (iv) deficient controls to review and approve inventory valuation, cost
of production calculation and cost of sales computation, (v) lack of physical inventory of fixed assets; and (vi) 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: 0.5in">Fiscal Year Ended December 31,
2014</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, 2014, the following material weaknesses
were identified:</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>Insufficient resources applied to the remediation and appropriate monitoring of internal control weaknesses, most of which
were identified in previous years and continue to be unresolved.</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 distribution and segregation of duties within the accounting department in the Mexican Subsidiaries due to insufficient
resources. Additionally, the internal audit staff was reduced and considered insufficient to fulfill their role.</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 detected regarding entity-level controls and control environment which, in the aggregate, constitute
a material weakness, and which include: (i) inadequate controls</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 1in">for the definition, review and approval process of the
disclosure in the financial statements and our annual report on form 20-F, (ii) non-operating and outdated whistleblower line for
the Mexican subsidiaries, (iii) ineffective controls in our patents registry, (iv) deficient distribution of our code of ethics
to employees and officers and poor promotion of strong control environment and internal controls in accordance with the COSO model,
(v) failure to integrate all control processes into one Enterprise Resource Planning (ERP) system, (vi) lack of an accounting manual
with accounting instructions on most of accounting records, (vii) lack of specific procedures for the approval of transactions
with related parties, (viii) failure to create and implement a complete training plan for management personnel preparing financial
records, (ix) limited IFRS and consolidation process understanding and reduced personnel within our Internal Audit department which
limited the scope of the management assessment; the internal audit plan was not carried out in full and did not include tests about
risk assessment, including environmental, fraud, compliance with laws and review of the consolidated financial statements; (x)
lack of committees to review, approve and make risk assessments of all our contracts, and (xii) informal communications of deficiencies
and remediation plan to the areas and managers involved.</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>Inadequate supervision and controls within the accounting department which impacted the financial statement closing process,
conversion of foreign subsidiaries and intercompany reconciliations, 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 properly supervise the preparation of consolidated financial
information with the detail required.</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>SimRep did not maintain effective controls relating to accounting of certain capital expenditures and related fixed assets
were found. Lastly, the evaluation for impairments is not reasonable given actual results of such Subsidiary.</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) ineffective controls and insufficient supporting documentation
for closings of periods end and financial statements review and authorization; the related procedures were incomplete and do not
include specific procedures to enter transactions into the general ledger, to select and apply accounting policies and have not
been updated in the last 3 years, which such controls are necessary to give reasonable assurance of compliance with IFRS, (ii)
no evidence of review of some account balances, such as fixed assets, sales and tax calculations by the responsible individuals;
there is also no evidence of review of the financial statements by the General Manager of Corporaci&oacute;n Aceros DM, S.A de
C.V., (iii) undocumented processes and deficient controls in the access to the information systems, (iv) deficient controls to
review and approve cost calculations of finish goods, period end costs and inventories and cost of sales report, (v) lack of physical
inventory of fixed assets in several years; and (vi) 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: 0.5in">Fiscal Year Ended December 31,
2015</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><FONT STYLE="font-style: normal">Our
management did not assess the effectiveness of our internal controls over financial reporting as of December 31, 2015. The internal
audit department did not develop its functions to comply with the analysis of the controls during 2015, consequently, this limited
the functions of the Audit Committee. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in">Our external auditors have incorporated
into their &quot;Attestation Report of the Independent Registered Public Accounting Firms&quot; (see item 15.C), the following
assessment of our internal controls, which included 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>Insufficient resources applied to the remediation and appropriate monitoring of internal control weaknesses, most of which
were identified in previous years and continue to be unresolved.</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">&#183;</FONT></TD><TD>Inadequate distribution and segregation of duties within the accounting department in our Subsidiaries due to insufficient
resources. Additionally, the internal audit staff was considered insufficient to fulfill their role.</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 detected regarding entity-level controls and control environment which, in the aggregate, constitute
a material weakness and create a reasonable likelihood that a material misstatement of our annual and interim financial statements
will not be prevented or detected on a timely basis, such deficiencies include: (i) inadequate controls for the definition, review
and approval process of the disclosure in the financial statements and our annual report on form 20-F, (ii) whistleblower line
for our Mexican subsidiaries was not fully operational, our website information is outdated and does not include information about
our Brazilian operations, (iii) ineffective controls in our patents registry, (iv) deficient distribution of our code of ethics
to employees and officers and poor promotion of strong control environment and internal controls in accordance with the COSO model,
(v) failure to integrate all control processes into one Enterprise Resource Planning (ERP) system, (vi) lack of an accounting manual
with accounting instructions on most of accounting records, (vii) lack of specific procedures for the approval of transactions
with related parties, (viii) failure to create and implement a complete training plan for management personnel preparing financial
records under IFRS, (ix) limited IFRS and consolidation process understanding and reduced personnel within our Internal Audit department
which limited the scope; also the internal audit plan was not carried out, and therefore the audit department did not perform risk
assessment and environmental, fraud, compliance with laws, review of the consolidated financial statements and review of our annual
report on form 20-F; (x) lack of committees to review, approve and make risk assessments of all our contracts; and (xi) informal
communications of deficiencies and remediation plan to the areas and managers involved.</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 the accounting department which impacted the financial statement closing process,
conversion of foreign subsidiaries, intercompany reconciliations and a lack of controls for the issuance and authorizations of
journal entries, 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 properly supervise the preparation of consolidated financial
information with the detail required.</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>SimRep did not maintain personnel with the appropriate level of knowledge and experience of accounting and training required
to comply with financial reporting requirements. This material weakness led to the certain control deficiencies, each of which
are considered to be a material weakness. See Item 15.C &ldquo;Attestation Report of the Independent Registered Public Accounting
Firms.&rdquo;</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>Failure to provide our external auditors with evidence of the evaluation of the effectiveness of internal controls in our Brazilian
subsidiary, in addition of not hiring an external auditor for this evaluation.</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. See Item 15.C &ldquo;Attestation Report of the Independent Registered Public Accounting Firms.&rdquo;</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-indent: 0.5in"><B>Report of Independent Registered Public Accounting
Firm </B></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"><B>The Board of Directors and Stockholders </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Grupo Simec, S.A.B. de C.V.</B></P>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We have audited Grupo Simec, S.A.B. de
C.V. and subsidiaries' (the Company) internal control over financial reporting as of December 31,2015, based on criteria established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the
COSO 1992 criteria).The Company&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's
Annual Report on Internal Control Over Financial Reporting. Management did not assess the effectiveness of the Company&rsquo;s
internal controls over financial reporting as of December 31, 2015. Our responsibility is to express an opinion on the Company's
internal control over financial reporting based on our audit. We did not examine the effectiveness of internal control over financial
reporting of the subsidiaries included in the consolidated financial statements of Corporaci&oacute;n Aceros D.M., S.A. de C.V.
and subsidiaries, wholly owned subsidiaries, which total assets represent approximately 10% of the total consolidated assets as
of December 31,2015 and its net sales for the year then ended represented approximately a 4% of the total net consolidated sales.
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 expressed a qualified opinion. Our opinion, insofar as it relates
to the effectiveness of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries 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 12pt; text-indent: 0.5in">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 12pt; text-indent: 0.5in">A company'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 (TFRS). A company'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'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 12pt; text-indent: 0.5in">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 12pt; text-indent: 0.5in">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.
We identified the following material weaknesses (management of the Company did not assess the effectiveness of the Company&rsquo;s
internal controls over financial reporting as of December 31, 2015):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">(1)&#9;The internal audit department
did not develop the functions to comply with the analysis of the controls during 2015, consequently, this limited the functions
of the Audit Committee. From the second quarter of 2016 and until the date of issuance of this report, the Company does not have
an Internal Audit Director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">(2)&#9;The recurrent lack for several
years of appropriate monitoring of material weaknesses reported on previous years due to their prevalence on the report of this
year.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">(3)&#9;Many accounting functions centralized
on few persons due to lack of resources and inadequate segregation of duties and insufficient internal audit staff.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">(4)&#9;Regarding the entity-level controls
and control environment, considering the COSO 1992 established by the Company, the framework elements needs to be applied to protect
the Company about significant deficiencies that could affect the effectiveness of the internal controls, however, we found the
following deficiencies, (a) improper controls to define, review and approve the disclosures in the financial statements and also
the review and approval of the 20-F Report, (b) the whistleblower line for the Company and its Mexican subsidiaries are not fully
operational and the contact information within the Company&rsquo;s website is not updated and does not include information about
Brazil, (c) ineffective controls in the patents registry, (d) insufficient diffusion of the ethical code and poor promotion of
strong control environment and internal controls in accordance the COSO model, (e) control processes are not integrated under one
single Enterprise Resource Planning (ERP) system, (f) lack of an accounting manual with instructions on most of accounting records,
(g) lack of a specific procedure for the approval of transactions with related parties, (h) lack of a training plan for management
personnel conducting the preparation of the Financial Information with IFRS, (i) there was a lack of IFRS and Consolidation expertise
in the Internal Audit department ; also the internal audit plan was not carried out, and therefore the internal audit department
did not perform risk assessment procedures on environmental, fraud and compliance with laws, review of the Consolidated Financial
Statements and review of the 20-F Report, (j) lack of Committees to assess Company contracts, and evaluation of internal and external
risks to measure the level of impact and mitigation plans for identified risks, and (k) informal communication of deficiencies
and remediation plan to the areas and managers involved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">These deficiencies are individually and
in the aggregate, material weakness, and therefore there is a reasonable possibility that a 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 12pt; text-indent: 0.5in">(5)&#9;Lack of appropriate accounting
resources during 2015 at the corporate level which 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, intercompany reconciliation
and lack of controls for the issuance and authorization of journal entries. 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 12pt; text-indent: 0.5in">(6)&#9;Lack of an 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 detailed analysis. Consequently
the preparation of the figures of the consolidation is complex because there is not enough detail to allow a user to have a clear
and precise understanding of the operations contained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">(7)&#9;In the subsidiary level, SimRep
Corporation and Subsidiaries (the entity) did not maintain a sufficient competent personnel with an appropriate level of knowledge
of accounting, experience and training commensurate with the financial reporting requirements. This material weakness contributed
to the following control deficiencies, each of which are considered to be a material weakness:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- IT General Controls &ndash; The entity
did not design and maintain processes and procedures that restrict access to key financial systems and records to appropriate users
and evaluate whether appropriate segregation of duties is maintained. Specifically, certain personnel had access to financial application,
programs and data beyond that needed to perform their individual job responsibilities without independent monitoring. Further,
controls over the approval of program changes (to the OFS application) were not effectively operated allowing for the potential
introduction of unapproved changes into the financial application. With the IT general controls environment ineffective, manual
reviews of the completeness and accuracy of reports supporting transaction processing (and, correspondingly, supporting the controls
over transaction processing) are not sufficiently designed and implemented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- Ineffective Review of
Reconciliations, Journal Entries and Financial Statements &ndash; The entity 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. Specifically, evidence
of the review and approval of manual journal entries was not maintained and the reconciliations of various accounts</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">contained errors that indicated effective supervision and
review was not performed timely. The impacted financial accounts included: Accrued Liabilities (e.g., legal costs), Accounts Payable,
Prepaid Accounts, Cash and Intercompany Balances, Accounts Receivable and related Allowance for Doubtful Accounts, and the recording
of Spare Parts Inventory. Further, the entity did not maintain effective controls related to the preparation and presentation of
the statement of cash flows included within the entity&rsquo;s financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- Fixed Asset Management and Review &ndash;
The entity did not maintain effective controls related to the authorization of fixed asset additions and subsequent evaluation
of the fixed assets for proper classification and potential impairment (valuation). The lack of proper valuation evaluation resulted
in a correction of a financial misstatement that reduced recorded fixed assets (net) by approximately $130 million. Further, misstatements
related to the classification of costs associated with projects that were put into service during the period, where such costs
were not properly moved from CIP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- Related Party Identification and Transactions
&ndash; The entity did not design and maintain effective controls relating to the identification of related parties nor the identification,
approval, recording and disclosure of related party transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- Inventory Management and Review &ndash;
The entity did not maintain effective controls related to the management and review of inventory balances, resulting in the need
for correction of accounting errors. In addition to the valuation adjustment, it was noted that controls related to the taking
of a physical inventory (existence) at the Lorain, Ohio plant and inventories held with outside processors were lacking.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- IFRS / Technical Accounting &ndash;
The entity has 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. Specifically, the entity
does not have sufficient resources/expertise to evaluate adjustments required to &lsquo;bridge&rsquo; the entity&rsquo;s US GAAP-based
financial statements to IFRS-based financial reporting for purposes of
reporting to its corporate parent (that reports under IFRS) or properly supervise and review the income tax provision (including
the recording and valuation of deferred tax assets).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">(8)&#9;&nbsp;&nbsp;&nbsp;The Company did not provide us
evidence of the evaluation of the effectiveness of internal controls in its Brazilian subsidiary denominated: &quot;GV do Brasil
Industria e Comercio de A&ccedil;o LTDA&quot; also not carried out hiring an external auditor for this evaluation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">These material weaknesses were considered
in determining the nature, timing and extent of audit tests applied in our audit of the 2015 financial statements and this report
does not affect our report dated September 19, 2016 on those financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">In our opinion, Grupo Simec, S.A.B. de
C.V. and subsidiaries did not maintain, in all material respects, effective internal control over financial reporting as of December
31, 2015, based on the COSO 1992 criteria. The other auditors issued an adverse opinion of Corporaci&oacute;n Aceros D.M., S.A.
de C.V. and subsidiaries.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- (a) There are no clear procedures that
include detailed controls related to recording transactions into general ledger, (b) There is a lack of policies, including accounting
policies, or those for internal controls that are required due to the complexity of the operation in the entity; (c) There is an
insufficient code of ethics that has not been updated for several years and has not been communicated to all employees of the Company
and which content is not adequate for the complexity of the Company&rsquo;s operations, (d) There is not a training plan for Accounting
and / or Treasury personnel that help them to understand and comply with rules, risk prevention and controls regarding Section
404, Sarbanes Oxley.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- The Company has a deficiency in operation
regarding the internal controls related on the support of the review over financial closing process, there is not enough procedures
for such closing process, such as: procedures to enter transactions into general ledger, and manual journal entries ( which were
found not supported adequately).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- Regarding the area of information technology,
there is a deficiency in the design and implementation of controls; There were undocumented processes and deficient controls regarding
control access to information systems, specifically with regard to those users whose job positions are directly involved in the
financial closing process. For at least 3 years, no internal audits have been performed by management or any audit personnel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- In the process regarding fixed assets,
management has not performed a physical inspection of these items in several years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- The organization has not implemented
policies and procedures that facilitate effective internal communication, including individual internal control authorities and
responsibilities, as well as standards of conduct across the organization. The authority lines and delegation of authority must
be established clearly and in a formal matter. Management lacks of personnel&acute;s training plan, specific for key roles related
to financial matters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">- The communications between the board
of directors and management does not facilitate their oversight of the organization&rsquo;s internal control; this includes matters
such as the assessment of risks to the achievement of the organization&rsquo;s financial reporting objectives or actions; for example,
the Entity did not allocate the required resources to review and reform the Company level controls to ensure compliance with the
COSO framework and complete the transition to the COSO 2013 framework. As a result, there was no action plan to ensure the Company
will comply with COSO 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">We do not express an opinion or any other
form of assurance on management&rsquo;s statements referring to any corrective actions taken or planned to be taken by the company
after December 31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">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, 2015 and 2014, and the related consolidated statements of comprehensive
income, changes in stockholders' equity and cash flows for the three years ended December 31, 2015, 2014 and 2013, and our report
dated September 6, 2016 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 31,2015 and 2014, which total assets represent approximately 10% and
9% of the total consolidated assets at those dates, respectively, and its net consolidated sales for the years ended as of December
31, 2015, 2014 and 2013 represented 4%, 5% and 14% 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 Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Castillo Miranda y Compa&ntilde;&iacute;a,
S.C. Member of BDO International</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">C.P.C. Juan Mart&iacute;n Gudi&ntilde;o
Casillas</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Guadalajara, Jalisco, Mexico, September 19,
2016</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">&nbsp;</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>

<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,
2013</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, 2013 and the material weakness and deficiencies identified
during that period, we will need to increase the resources allocated to implement remedial measures due to prevalence of deficiencies
from previous years, if we implement the following remedial measures, we believe such 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: 17.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>We will allocate the required resources to review and reform our entity level controls to comply with the COSO framework, addressing
all the issues that were found on our 2013 assessment of our internal control and implementing a plan to adopt the COSO 2013 framework.</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: 17.5pt"></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, 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: 17.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD>In our subsidiary SimRep we will review the capital expenditure authorization and control 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: 17.5pt"></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) strengthen our controls and procedures for the reviewing
process monthly financial closings and financial statements authorization, (ii) document and improve the control access to information
systems, (iii) strengthen the controls related to the inventory and cost calculations and computation, (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: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Fiscal Year Ended December 31,
2014</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, 2014 and the material weakness and deficiencies identified
during that period, we will need to increase the resources allocated to implement the remedial measures due to prevalence of deficiencies
from previous years, if we implement the following remedial measures, we believe such are reasonably likely to materially improve
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 allocate the required resources to review and reform our entity level controls to ensure compliance with the COSO framework,
complete the transition to the COSO 2013 framework and address all the issues that were found on our 2014 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 increase the internal audit staff to execute testing of control activities that was not otherwise executed on the 2014
management Assessment.</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 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 Corporaci&oacute;n Aceros D.M., S.A. de C.V. we will assign more resources to implement the remedial measures
that have not been implemented in the last three years and to complete the transition into the 2013 COSO framework.</TD></TR></TABLE>



<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><A NAME="a_Toc323315322"></A><A NAME="a_Toc323310726"></A><A NAME="a_Toc323254064"></A><A NAME="a_Toc323253673"></A><A NAME="a_Toc323253349"></A><A NAME="a_Toc322026675"></A><A NAME="p101"></A>Fiscal
Year Ended December 31, 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">As a result of the evaluation on the
effectiveness of our internal controls for the year ended December 31, 2015 by our external auditors and the material weakness
and deficiencies identified during that period, we will need</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">to increase the resources allocated to implement the remedial
measures due to their prevalence from previous years, if we implement the following remedial measures, we believe such are reasonably
likely to materially improve 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 allocate the required resources to reform our entity level controls to ensure compliance with the COSO framework, complete
the transition to the COSO 2013 framework and address all the issues that were found on our 2015 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 subsidiaries in order to improve
internal controls over financial reporting to avoid 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 Corporaci&oacute;n Aceros D.M., S.A. de C.V. we will assign more resources to implement the remedial measures
that have not been implemented in the last four years and to complete the transition into the 2013 COSO framework.</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 designate a new head of the Internal Audit Department and we will strengthen the internal audit function by hiring
(one or two) employees to conduct the testing activities of the internal controls over financial reporting.</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 invest Ps.1.5 million in hiring an outside firm to assist our management and our Internal Audit Department in implementing
remedial measures for the material weaknesses found in previous years.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"> <A NAME="a_Toc462142430"></A><FONT STYLE="color: #010000">Item</FONT> <FONT STYLE="color: #010000">16.<FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT>Reserved</P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><A NAME="a_Toc462142431"></A><A NAME="a_Toc323315323"></A><A NAME="a_Toc323310727"></A><A NAME="a_Toc323254065"></A><A NAME="a_Toc323253674"></A><A NAME="a_Toc322026676"></A><A NAME="p101a"></A>Item
16A.&#9;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_Toc462142432"></A><A NAME="a_Toc323315324"></A><A NAME="a_Toc323310728"></A><A NAME="a_Toc323254066"></A><A NAME="a_Toc323253675"></A><A NAME="a_Toc322026677"></A><A NAME="p101b"></A>Item
16B.&#9;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 2014 and 2015, 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_Toc462142433"></A><A NAME="a_Toc323315325"></A><A NAME="a_Toc323310729"></A><A NAME="a_Toc323254067"></A><A NAME="a_Toc323253676"></A><A NAME="a_Toc322026678"></A><A NAME="p102"></A>Item
16C.&#9;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 independent auditors to prepare our consolidated financial statements, as of and for the years ending December 31, 2015 and
2014. The audit of Aceros DM and subsidiaries and affiliates, located in San Luis Potos&iacute;, S.L.P. Mexico, continues to be
audited by Marcelo de los Santos, S.C., a practice member of Moore Stephens.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Audit Fees</I>. We paid Ps. 18.9 million
in fees to BDO in connection with the audit and preparation of our annual consolidated financial statements for 2015, included
in our annual report on Form 20-F, and Ps. 2.3<SUP> </SUP>million to Marcelo de los Santos, S.C., for the corresponding audit of
Aceros DM and subsidiaries and affiliates. We paid Ps. 11.2 million in fees to BDO in connection with the audit and preparation
of our annual consolidated financial statements for 2014, included in our annual report on Form 20-F, and Ps. 2.3 million to Marcelo
de los Santos, S.C., for the corresponding audit of Aceros DM and subsidiaries and affiliates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Audit Related Fees</I>. In 2015 and
2014, 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 2015 and 2014, 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 other fees
to BDO in 2015. In 2014 we paid other fees to BDO in the amount of Ps. 0.8 million.</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 2014 and 2015, 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_Toc462142434"></A><A NAME="a_Toc323315326"></A><A NAME="a_Toc323310730"></A><A NAME="a_Toc323254068"></A><A NAME="a_Toc323253677"></A><A NAME="a_Toc322026679"></A><A NAME="p102a"></A>Item
16D.&#9;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_Toc462142435"></A><A NAME="a_Toc323315327"></A><A NAME="a_Toc323310731"></A><A NAME="a_Toc323254069"></A><A NAME="a_Toc323253678"></A><A NAME="a_Toc322026680"></A><A NAME="p102b"></A>Item
16E.&#9;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_Toc462142436"></A><A NAME="a_Toc323315328"></A><A NAME="a_Toc323310732"></A><A NAME="a_Toc323254070"></A><A NAME="a_Toc323253679"></A><A NAME="a_Toc322026681"></A><A NAME="p103"></A>Item
16F.&#9;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_Toc462142437"></A><A NAME="a_Toc323315329"></A><A NAME="a_Toc323310733"></A><A NAME="a_Toc323254071"></A><A NAME="a_Toc323253680"></A><A NAME="a_Toc322026682"></A><A NAME="p104"></A>Item
16G.&#9;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</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">three independent directors, that assists the board in determining
executive compensation. Shareholders, at our annual shareholders meeting, or the board of directors, make the final determination
about executive compensation. Shareholders&rsquo; approval must be acquired for the adoption and amendment of any equity compensation
plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Audit Committee and Auditors. </I>Our
Audit Committee is governed by: (i) our by-laws and (ii) Mexican law. Our Audit Committee is made up of at least three independent
directors, appointed by the board of directors. Our shareholders appoint and/or remove the chairman of the Audit Committee at the
annual shareholders meeting. In accordance with Mexican law, the Audit Committee must provide an opinion regarding any transaction
with a related party, outside of the ordinary course of business. Such transactions must also be approved by the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Under Mexican law, we must be audited
by an independent public accountant that has received a &ldquo;quality control review,&rdquo; as defined by the general rules issued
by the CNBV. These general rules require accounting firms rendering external audit services, to fulfill higher independence standards,
as well as issuing and following quality control internal policies and manuals in accordance with the rules issued by the Mexican
Institute of Public Accountants (<I>Instituto Mexicano de Contadores P&uacute;blicos, A.C.</I>).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Quorum Requirements and Shareholders&rsquo;
Approval</I>. In compliance with Mexican law, shareholders representing 50% of our capital stock must be present to conduct business
at the first call for ordinary shareholders meetings, dealing with general matters. If a quorum is not reached, there is no minimum
quorum requirement for a second or subsequent call. Resolutions approved at ordinary shareholders&rsquo; meetings are valid when
approved by a majority of the shares present. On the other hand, shareholders representing 75% of our capital stock must be present
to conduct business at the first call for extraordinary shareholders meeting dealing with modifications to the our by-laws. If
a quorum is not reached, shareholders representing 50% of our capital stock must be present at the meeting in a second or subsequent
call. Resolutions at extraordinary shareholders meetings are valid if approved by shares representing more than 50% of our capital
stock. However, resolutions regarding the (i) quorum requirements, (ii) minority shareholders&rsquo; rights, (iii) merger, spin-off
and conversion are valid if approved by at least 75% of our capital stock. Furthermore, resolutions regarding our registration
with the National Securities Registry (<I>Registro Nacional de Valores</I>) are valid if approved by at least 95% of our capital
stock. Class II Series &ldquo;L&rdquo; Shares, representative of our capital stock with limited economic and corporate rights,
are not taken into account when determining the quorum at the general shareholders&rsquo; meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><I>Code of Conduct and Ethics</I>. In
compliance with Mexican law, we have a code conduct and ethics for our directors or executive officers. Also, our directors&rsquo;
and executive officers&rsquo; conduct is subject to the applicable provisions of the Mexican Securities Market Law and the regulations
issued by the CNBV.</P>

<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_Toc323253350"></A><A NAME="a_Toc323253681"></A><A NAME="a_Toc323254072"></A><A NAME="a_Toc323310660"></A><A NAME="a_Toc323310734"></A><A NAME="a_Toc323310770"></A><A NAME="a_Toc323315330"></A><A NAME="a_Toc462142438"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; color: #010000"><B>PART
III</B></FONT>&nbsp;</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"></TD><TD STYLE="width: 0.25in"><A NAME="a_Toc462142439"></A><A NAME="a_Toc323315331"></A><A NAME="a_Toc323310735"></A><A NAME="a_Toc323254073"></A><A NAME="a_Toc323253682"></A><A NAME="a_Toc323253351"></A><A NAME="a_Toc322026684"></A><A NAME="p105"></A>Item&nbsp;</TD><TD>17.<FONT STYLE="font: 8pt Times New Roman, Times, Serif"> </FONT></TD></TR></TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in">Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">See &quot;Item 18&mdash;Financial Statements.&quot;</P>

<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"><A NAME="a_Toc462142440"></A><A NAME="a_Toc323315332"></A><A NAME="a_Toc323310736"></A><A NAME="a_Toc323254074"></A><A NAME="a_Toc323253683"></A><A NAME="a_Toc323253352"></A><A NAME="a_Toc322026685"></A><A NAME="p105a"></A><FONT STYLE="color: #010000">Item&nbsp;</FONT></TD><TD><FONT STYLE="color: #010000">18.<FONT STYLE="font: 8pt Times New Roman, Times, Serif"> </FONT></FONT>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 on page F-1.</P>


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

<P STYLE="color: #010000; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><A NAME="a_Toc462142441"></A><A NAME="a_Toc323315333"></A><A NAME="a_Toc323310737"></A><A NAME="a_Toc323254075"></A><A NAME="a_Toc323253684"></A><A NAME="a_Toc323253353"></A><A NAME="a_Toc322026686"></A><A NAME="p106"></A>Item
19. Exhibits</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">Pursuant to the rules and regulations
of the SEC, we have filed certain agreements as exhibits to this annual report on Form 20-F. Documents filed as exhibits to this
annual report:</P>

<TABLE 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">Exhibit</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid">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"><A NAME="a_Toc322026687"></A>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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt"><B>GRUPO SIMEC, S.A.B. DE C.V.</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 5%; padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">By:</TD>
    <TD STYLE="padding-right: 5.4pt; border-bottom: Black 1pt solid">/s/ Luis Garc&iacute;a Lim&oacute;n</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">Luis Garc&iacute;a Lim&oacute;n</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt"><I>Chief Executive Officer</I></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">By:<B> </B></TD>
    <TD STYLE="padding-right: 5.4pt; border-bottom: Black 1pt solid">/s/ Mario Moreno Cortez</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">Mario Moreno Cortez</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt"><I>Coordinator of Finance</I></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 233.1pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: September 21, 2016</P>

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

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

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

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

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

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"><B>Grupo Simec, S.A.B. de C.V.
and subsidiaries</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"><B>(A subsidiary of Industrias
CH, S.A.B. de C.V.)</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"><B>Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"><B>As of December 31, 2015, 2014
and 2013</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt; text-align: center"><B>and Independent Auditors&rsquo;
Report</B></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 22pt 14.2pt; text-align: center"><B>Index to Consolidated Financial
Statements </B></P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 93%; text-decoration: underline"><FONT STYLE="font-family: Arial, Helvetica, Sans-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;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;&nbsp;&nbsp;</U></FONT></TD>
    <TD STYLE="width: 7%; text-decoration: underline; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><U>Page</U></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-decoration: none">&nbsp;</TD>
    <TD STYLE="text-decoration: none; text-align: center"></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Report of Castillo Miranda y Compa&ntilde;ia, S.C.</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Report of Marcelo de los Santos y Cia., S.C.</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Consolidated Statements of Financial Position</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Consolidated Statements of Comprehensive Income (Loss)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Consolidated Statements of<B> </B>Changes in Stockholders&rsquo; Equity</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-6</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Consolidated Statements of Cash Flows</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Notes to the Consolidated Financial Statements</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">F-8</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 27.9pt 0 14.2pt">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">The Board of Directors and Stockholders of</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Grupo Simec, S.A.B. de C.V.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">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, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in stockholders&rsquo; equity
and cash flows for each of the years ended December 31, 2015, 2014 and 2013. 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 statements of financial position of Corporaci&oacute;n Aceros D.M., S.A. de C.V.
and subsidiaries as of December 31, 2015 and 2014, nor the related consolidated statements of comprehensive income, changes in
stockholders&rsquo; equity and cash flows for each of the years ended December 31, 2015, 2014 and 2013, which total consolidated
assets represent approximately 10% and 9% of the total consolidated assets at those dates, respectively, and its net consolidated
sales for the years ended as of December 31, 2015, 2014 and 2013 represented 4%, 5% and 14% 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 Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; 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 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 standards used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of the others auditors provide a reasonable basis
for our opinion.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">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, 2015 and 2014, and the consolidated
results of their operations and their cash flows for each of the years ended December 31, 2015, 2014 and 2013, in conformity with
International Financial Reporting Standards as issued by the International Accounting Standards Board.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">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, 2015, based on criteria established in Internal
Control &ndash; Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO 1992
criteria). 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 September 19, 2016 expressed an adverse opinion on the effectiveness of the Company&rsquo;s internal control over financial
reporting.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Castillo Miranda y Compa&ntilde;&iacute;a, S.C.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">/s/ Juan Mart&iacute;n Gudi&ntilde;o Casillas</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Juan Mart&iacute;n Gudi&ntilde;o Casillas</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Guadalajara, Jalisco, Mexico</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">September 19, 2016</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">The Board of Directors and Stockholders of</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Corporaci&oacute;n Aceros D.M., S.A. de C.V.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; 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, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in stockholders&rsquo;
equity, and cash flows for each of the three years ended December 31, 2015 and 2014 and 2013. 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: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; 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 standards 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: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">In our opinion, based on our
audits, the consolidated financial statements referred to above present fairly, in all other material respects, the financial position
of Corporaci&oacute;n Aceros D.M., S.A. de C.V. and subsidiaries, as of December 31, 2015 and 2014, and the comprehensive results
of their operations, the changes in stockholders' equity and cash flows for each of the three years ended December 31, 2015, 2014
and 2013, in conformity with International Financing Reporting Standards as issued by the International Accounting Standards Board.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">Corporaci&oacute;n Aceros D.M.,
S.A. de C.V. and subsidiaries&rsquo; internal control over financial reporting as of December 31, 2015, based on criteria established
in Internal Control &ndash; Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO 1992). Our report dated September 19, 2016 expressed an adverse opinion on the effectiveness of the Company&rsquo;s internal
control over financial reporting.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">San Luis Potosi, S.L.P. September 19, 2016</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Marcelo de los Santos y C&iacute;a., S.C.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Carlos de los Santos Anaya, C.P.A.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">Professional identity Card 3558271</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.75pt 0 14.2pt">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>As of December 31, 2015 and
2014</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 12 14.2pt; text-align: center"><B>(In thousands of Mexican pesos)</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->


<P STYLE="font: 10pt Arial, Helvetica, Sans-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>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 2pt; font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Note</B></FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 2pt; font-family: Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 14</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 54%; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Current assets:</B></FONT></TD>
    <TD STYLE="width: 8%; padding-right: -2pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Cash and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6,224,502</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7,003,373</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Other investments</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">374,359</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; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">305,085</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Trade receivables, net</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,250,801</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,756,150</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Related party receivables</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">18-b</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">499,951</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">174,427</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Recoverable taxes</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">8</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">965,007</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">578,033</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Other receivables</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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">236,058</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">193,350</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">317,925</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">141,439</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Inventories, net</FONT></TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">9</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6,110,847</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6,521,180</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, 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="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">16,979,450</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">17,673,037</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-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: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Non-current inventories, net</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">9</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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1,485,666</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1,703,582</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">11,129,200</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">13,619,337</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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 Arial, Helvetica, Sans-Serif">11</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,650,100</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,900,533</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><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: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">32,244,416</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">35,896,489</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Liabilities and stockholders&rsquo; equity</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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Current liabilities:</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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Short-term debt</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">12</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: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">5,237</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">4,450</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Trade accounts payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">3,102,944</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">3,656,895</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Related party payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">18-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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">886,928</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">754,791</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">665,934</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">574,029</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Taxes 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; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">755,585</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">555,372</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">171,148</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">275,344</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Total current liabilities</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: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">5,587,776</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">5,820,881</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Long term liabilities:</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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Employee benefits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">93,432</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">83,499</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Deferred income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1,395,090</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,156,077</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">46,737</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">55,387</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Contingencies and Commitments</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">24 and 25</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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-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">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Total long-term liabilities</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: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1,535,259</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,294,963</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Total liabilities</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: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7,123,035</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">8,115,844</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Times New Roman, 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-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: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Stockholders&rsquo; equity</B><FONT STYLE="font-weight: normal">:</FONT></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">16</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,832,268</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">4,094,600</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">4,170,857</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">17,168,304</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">18,382,594</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Repurchase of own capital stock reserve</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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">557,927</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">726,959</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Cumulative translation effects 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1,920,136</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">927,162</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-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="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Total controlling interest</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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">26,573,235</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: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">27,039,840</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Non-controlling interest</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">17</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.25pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(1,451,854)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">740,805</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>Total stockholders&rsquo; equity</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: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">25,121,381</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">27,780,645</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&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: Arial, Helvetica, Sans-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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>Total liabilities and stockholders&rsquo; equity</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: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">32,244,416</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">35,896,489</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 28pt 0 14.2pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>Consolidated Statements of Comprehensive
Income (Loss)</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For the years ended December
31, 2015, 2014 and 2013</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 12 14.2pt; text-align: center"><B>(In thousands of Mexican pesos,
except (loss) earnings per share figures)</B></P>


<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 22pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->
&nbsp;

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Note</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Net sales</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">24,475,821</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">26,828,761</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">24,368,940</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Cost of sales</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">19</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(23,096,967)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(25,492,298)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(22,410,267)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Impairment of property, plant and equipment&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3-g and 19</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,071,901)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -3.55pt; padding-left: 31.9pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>(Loss) income gross profit</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(693,047)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,336,463</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,958,673</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">19</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,582,489)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,193,718)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,116,659)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other income (expense), net</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">20</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">173,427</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">60,554</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(59,161)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Interest income </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">34,027</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">25,139 </FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">20,398</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Interest expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(40,195)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(22,614)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(28,714)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Foreign exchange (loss) gain, net</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(382,062)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">474,092</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(66,506)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" NOWRAP STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 31.9pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>(Loss) income before income taxes</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,490,339)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">679,916</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">708,031</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">15</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(770,572)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(161,997)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">281,568</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 31.9pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Net (loss) income for the year</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(3,260,911)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">517,919</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">989,599</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Other comprehensive income (loss):</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Translation effects of foreign subsidiaries</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">846,936</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,013,377</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" 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: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(152,658)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Fair value of derivative financial instruments, net of income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,060</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total other comprehensive income (loss) for the year, net of income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">846,936</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,013,377</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(151,598)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 31.9pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Comprehensive (loss) income for the year</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,413,975)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,531,296</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">838,001</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Net (loss) income attributable to:</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Controlling interest</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,214,290)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,203,524</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,516,553</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Non-controlling interest</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,046,621)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(685,605)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(526,954)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 31.9pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>(Loss) income net for the year</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(3,260,911)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">517,919</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">989,599</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Comprehensive (loss) income attributable to:</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Controlling interest</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(221,316)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,118,768</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,361,422</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Non-controlling interest</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,192,659)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(587,472)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(523,421)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: -2pt; padding-left: 31.9pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Comprehensive (loss) income for the year</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,413,975)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,531,296</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">838,001</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Earnings (loss) per share:</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Weighted average shares outstanding (in thousands of shares)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">492,421</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">492,781</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">495,732</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.85pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 0; padding-left: 7; text-indent: -7"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>(Loss) income per share (controlling interest) (Mexican pesos)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4-n</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2.47)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2.44</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 2pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3.06</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For the years ended December
31, 2015, 2014 and 2013</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 12 14.2pt; text-align: center"><B>(In thousands of Mexican pesos)</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->


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

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


<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 0in">&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-size: 9pt; border-top: Black 1pt solid"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Capital
    </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>stock</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-right: 0; margin-bottom: 0; text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Additional</B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>paid-in</B></FONT><BR><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>
    capital</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Retained
    </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>earnings</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Repurchase
    </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>of own capital </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>stock reserve</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Cumulative
    </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>translation </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>effects in </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>foreign </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>subsidiaries</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Fair
    value of </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>derivative </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>financial </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>instruments</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total
    </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>controlling </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>interest</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Non-</B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>controlling </B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>interest</B></FONT></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 9pt; text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 2; padding-left: 2"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total
    </B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>stockholders&rsquo;</B></FONT><BR>
    <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>equity</B></FONT></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 33%; padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Balance
    as of December 31, 2012</B></FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 6%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,832,268</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 6%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4,153,850</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 7%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">16,662,517</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 6%; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 6%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">168,109</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 7%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1,060)</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 7%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">23,815,684</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 7%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,851,698</FONT></TD>
    <TD STYLE="width: 1%; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 6%; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">25,667,382</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Reserve
    for repurchase of own capital stock </FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1,000,000)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,000,000</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Repurchase
    of own capital stock, net</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3,568)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(226,850)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(230,418)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(230,418)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comprehensive
    income (loss)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,516,553</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(156,191)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,060</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,361,422</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(523,421)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">838,001</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Balance
    as of December 31, 2013</B></FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,832,268</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4,150,282</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17,179,070</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">773,150</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">11,918</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">24,946,688</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,328,277</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">26,274,965</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Repurchase
    of own capital stock, net</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">20,575</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(46,191)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(25,616)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(25,616)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 5.05pt; font-size: 9pt; text-indent: -5.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comprehensive
    income (loss)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,203,524</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">915,244</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,118,768</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(587,472)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,531,296</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Balance
    as of December 31, 2014</B></FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,832,268</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4,170,857</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">18,382,594</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">726,959</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">927,162</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">27,039,840</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">740,805</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">27,780,645</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Repurchase
    of own capital stock, net</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(76,257)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(169,032)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(245,289)</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(245,289)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comprehensive
    income (loss)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1,214,290)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">992,974</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(221,316)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2,192,659)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2,413,975)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.05pt; padding-left: 2pt; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Balance
    as of December 31, 2015</B></FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,832,268</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4,094,600</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17,168,304</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">557,927</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,920,136</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">26,573,235</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1,451,854)</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 9pt; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">25,121,381</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right; padding-left: 2pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 9pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 0in">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>


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    <!-- Field: /Page -->

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For the years ended December
31, 2015, 2014 and 2013</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 12 14.2pt; text-align: center"><B>(In thousands of Mexican pesos)</B></P>


<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->


<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</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: -4.45pt; padding-left: 3.55pt; text-align: center">&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; 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; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 54%; padding-right: 3.55pt; padding-left: 3.55pt; font-family: SimSun"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Operating activities:</B></FONT></TD>
    <TD STYLE="width: 1%; padding-right: -4.45pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 12%; 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; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 12%; 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; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: SimSun"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Net (loss) income of the year</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(3,260,911)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">517,919</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: SimSun"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">989,599</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: SimSun">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: SimSun"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Adjustments for:</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Depreciation and amortization</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,261,093</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,117,906</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,052,900</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Impairment of property, plant and equipment</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,071,901</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Employee benefits</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">9,933</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,103</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">3,527</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Allowance for slow moving inventories </FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">681,273</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">92,441</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">70,219</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Allowance for doubtful accounts</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">29,512</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(99,740)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(12,428)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Interest income from investing activities</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(34,027)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(25,139)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(20,398)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Interest expense from financing activities</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">40,195</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">22,614</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">28,714</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Unrealized foreign exchange loss (gain), net</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">172,576</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(559,681)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Income taxes</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">770,572</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">161,997</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(281,568)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,742,117</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,230,420</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,830,565</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Decrease (increase) in trade receivables</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">646,126</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(195,756)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(72,246)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(Increase) due from related parts receivables</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(325,524)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(20,002)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(32,997)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Decrease (increase) in inventories</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">687,296</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(5,955)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">259,495</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(Increase) in other accounts receivable, recoverable taxes and prepaid expenses</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(730,206)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(56,450)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(229,431)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(Decrease) increase in trade accounts payable</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(954,678)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">318,081</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">658,409</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(Decrease) increase in due to related parties payable</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(40,439)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(93,727)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">68,838</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(Decrease) increase in accrued expenses and taxes other than income taxes</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(1,406,375)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">193,369</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(431,480)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-left: 24.8pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Net cash flows (used) provided by operating activities</B></FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt Arial, Helvetica, Sans-Serif; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(381,683)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,369,980</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,051,153</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: SimSun; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: SimSun"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Investing activities:</B></FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: SimSun; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Acquisition of property, plant and equipment </FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(647,743)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(1,858,358)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(3,177,950)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Decrease (increase) in other non-current assets</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">27,965</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">78,034</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">210,033</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Other investments</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(69,392)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(305,085)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Interest income collected</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">34,027</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">25,139</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">20,398</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-left: 24.8pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Net cash flows used in investing activities</B></FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt Arial, Helvetica, Sans-Serif; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(655,143)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(2,060,270)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(2,947,519)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -3.7pt; padding-left: 10.75pt; text-indent: -10.75pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; 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: SimSun; 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="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: SimSun"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Financing activities:</B></FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; 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: SimSun; 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="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 11.15pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Repurchase and placement of own capital stocks, net</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(245,289)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(25,616)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(230,418)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Interest expense paid</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(40,195)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(22,614)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(28,714)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-left: 24.8pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Net cash flows used in financing activities</B></FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(285,484)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(48,230)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(259,132)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 2pt; font-family: SimSun; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Net (decrease) in cash and cash equivalents</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(1,322,310)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(738,520)</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 2pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">(1,155,498)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Cash and cash equivalents at beginning of year</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; 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-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">7,003,373</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">6,984,730</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">8,102,314</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 12.15pt; font-family: SimSun; text-indent: -7.05pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Effects of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies</FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">543,439</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">757,163</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">37,914</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4.45pt; 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-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="font: 9.5pt SimSun; padding-right: 3.7pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; 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="font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2pt; padding-left: 24.8pt; text-indent: -7.1pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Cash and cash equivalents at end of year</B></FONT></TD>
    <TD STYLE="padding-right: -4.45pt; padding-left: 2pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">6,224,502</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">7,003,373</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 2pt; padding-left: 2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 9.5pt SimSun; padding-right: 3.7pt; padding-left: 2pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">6,984,730</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

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

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


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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: center"><B>For years ended December 31,
2015, 2014 and 2013</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 12 14.2pt; text-align: center"><B>(In thousands of Mexican pesos,
except foreign currency and where indicated)</B></P>


<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->


<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif; text-transform: uppercase"><B>1.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Nature of business</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 35pt; text-align: justify">Grupo Simec, S.A.B. de C.V. is a&nbsp;<I>stock
corporation</I>&nbsp;with&nbsp;<I>variable capital,</I>&nbsp;incorporated under the laws of Mexico on August 22, 1990, with a duration
of 99 years.&nbsp;The Company is a subsidiary of Industrias CH, S.A.B. de C.V. (Industrias CH or ICH).&nbsp;The Company is located
in Guadalajara, Jalisco, Mexico and the address of its administrative offices is 601 Rd. Lazaro Cardenas, ZIP Code 44440.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 (Simec or the Company) are the manufacture and sale of iron and steel alloys products for
the construction and automotive industries both in Mexico, the United States of America (USA), Canada and since June 2015, began
partial operations in the plant of Brazil. (See Note 2-e).</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Part of the Company&rsquo;s shares
of stock are listed on the Mexican Stock Exchange and in the New York Stock Exchange (NYSE). (See Note 26).</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>2.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Significant events</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On January 20, 2015,
was founded Aceros Especiales Simec Tlaxcala, S.A. de C.V. with an investment of $ 50, being the shareholders Grupo Simec, S.A.B.
de C.V. with 49,999 shares class &quot;I&quot; and Simec International, S.A. de C.V. with 1 share class &quot;I&quot;.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 56.7pt; text-align: justify">Grupo Simec, S.A.B. de C.V.,
during 2015 at Extraordinary Assembly of Shareholders, increased the capital stock by $ 1,000,000.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On January 20, 2015,
was founded Recursos Humanos de la Industria Siderurgica de Tlaxcala, S.A. de C.V. with an investment of $ 50, being the shareholders
Grupo Simec, S.A.B. de C.V. with 49,999 shares class &quot;I&quot; and Simec International, S.A. de C.V. with 1 share class &quot;I&quot;.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On March 21, 2015,
Grupo Simec, S.A.B. de C.V. and Simec International, S.A. de C.V. (subsidiary company) (the &ldquo;companies&rdquo;), acquired
shares of a company named RRLC, S.A.P.I. de C.V (RRLC). These companies purchased 2,500 shares of Class &quot;I&quot;, ordinary,
nominative and without par value, of the fixed portion of capital stock, representing 50% of the shares of that class. In addition,
these companies purchased 46,103 shares of Class &quot;II&quot; which were purchased without the right to vote, nominative, and
without nominal value, representing the variable portion of capital stock and representing 100% of the shares of that class, in
the amount of $ 18,600. By the Extraordinary General Meeting of Shareholders of RRLC the appointment of members of the Board of
Directors of that company, composed exclusively by officers and shareholders of Grupo Simec, S.A.B. de C.V, so from that date the
Company consolidates the financial statements of RRLC.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">RRLC was formed by split of another
company on December 11, 2014, which was referred to tax loss by $&nbsp;311,529, at the date of acquisition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On October 30, 2015,
Simec International 7, S.A. de C.V. and Simec International, S.A. de C.V. (subsidiaries companies) (the &ldquo;companies&rdquo;),
acquired shares of a company named Grupo Chant, S.A.P.I. de C.V (Chant). These companies purchased 25,000 shares of Class &quot;I&quot;,
ordinary, nominative and without par value, of the fixed portion of capital stock, representing 50% of the shares of that class.
In addition, these companies purchased 1,000,000 of shares of Class &quot;II&quot; which were purchased without the right to vote,
nominative, and without nominal value, representing the variable portion of capital stock and representing 100% of the shares of
that class, in the amount of $ 167,000. By the Extraordinary General Meeting of Shareholders of Chant the appointment of members
of the Board of Directors of that company, composed exclusively by officers and shareholders of Grupo Simec, S.A.B. de C.V, so
from that date the Company consolidates the financial statements of Chant.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Chant was formed by split of another
company on December 11, 2014, which was referred to tax loss by $&nbsp;2,380,350, at the date of acquisition.</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">In June 2015, the
steel plant in Brazil started partial operations and in November 2015 start the sales, the plant will have a production capacity
of 450,000 tons per year of commercial steels; especially rebar and wire rod. Currently, we are in the process of market opening,
and we have established contact with major local suppliers of inputs and raw materials. The total cost of this project is USD$
300 million, approximately. In a second step, the intention is to enter the market of special steels for the automotive and electro-welded
in wire rod derived products.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Regarding a new plant
of special steels in the months of October and December 2015, some adjoining lands were acquired at the existing plant in Tlaxcala,
Mexico, whose estimated final extension is 100 hectares. On October 20, began the contract &quot;turnkey&quot; signed with Danieli
</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&amp;</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">
Officine Meccaniche for the construction of the new plant (except civil engineering) and the supply of all equipment. This new
plant will have an installed capacity of 600 thousand tons per year, with a construction period of 2 years and a trial period of
6 to 8 months prior to the start of operations. The budget for this project is USD$&nbsp;600 million, approximately.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">g.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">In June of 2015,
Republic Steel temporarily idled the newly constructed electric arc furnace at the Lorain facility in response to the severe economic
downturn in the energy exploration sector following the sharp drop in the price of oil which has led to significant market declines
and demand for product. As a consequence of this event management determined a triggering event took place to where the long-lived
assets at the Lorain facility may not be fully recoverable. Management performed an analysis of the fair value of the Lorain facility
with the assistance of an independent valuation firm and determined the net book value exceeded the fair value by approximately
USD$&nbsp;130.7 million (equivalent to $ 2,071,901) and as such recognized an asset impairment of this amount during the year ended
December 31, 2015. The fair value determination at the Lorain facility was based on an independent valuation of the Lorain melt
shop assets using the comparable match method of the market approach. The income approach was not considered an appropriate fair
value measurement due to the absence of reliable forecast data as the facility was idled indefinitely in early 2016.</FONT> <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">This
effect is presented in the Income Statement together with the cost of sales, by correspond to a impairment of the production plant.
See Note 10.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">h.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On August 8, 2013,
Grupo Simec, S.A.B. de C.V. and Simec International, S.A. de C.V. (subsidiary company) (the &ldquo;companies&rdquo;), acquired
shares of a company named Carrier Seehafen Operadora Maritima, S.A.P.I. de C.V (Seehafen).&nbsp;These companies purchased 500 shares
of Class &quot;I&quot;, ordinary, nominative and without par value, of the fixed portion of capital stock, representing 50% of
the shares of that class. In addition, these companies purchased 99,000 shares of Class&nbsp;&quot;II&quot; which were purchased
without the right to vote, nominative, and without nominal value, representing the variable portion of capital stock and representing
100% of the shares of that class, in the amount of $ 43,839.&nbsp;By the Extraordinary General Meeting of Shareholders of Seehafen
held also on August&nbsp;8, 2013, there were approvals of: the ratification of the shares transactions described above, the denomination&nbsp;change
of Seehafen to Simec International 9, S.A.P.I de C.V (Simec 9), the modification of the company name and the appointment of members
of the Board of Directors of that company, composed exclusively by officers and shareholders of Grupo Simec, S.A.B. de C.V, so
from that date the Company consolidates the financial statements of Simec 9.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 56.7pt; text-align: justify">Seehafen was formed by split
of another company on August 3, 2012, which was referred to tax loss by $&nbsp;982,951.&nbsp;The statement of financial position
at the date of acquisition was as follows:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding: 0.75pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Assets:</FONT></TD>
    <TD COLSPAN="2" STYLE="padding: 0.75pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="width: 72%; padding: 0.75pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other receivables</FONT></TD>
    <TD STYLE="width: 4%; border-bottom: black 1pt solid; padding: 0.75pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 24%; border-bottom: black 1pt solid; padding-right: 5pt; padding-left: 5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding: 0.75pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Stockholders' equity</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 0.75pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding-right: 5pt; padding-left: 5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">i.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">At the Extraordinary
general meeting of Shareholders of Simec USA Corporation (Simec USA) and Simec International 5, Inc. (Simec 5), held on November
20, 2013, was authorized the merger of these companies, subsisting Simec USA and extinguishing Simec 5.</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">j.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">At the Extraordinary
general meeting of Shareholders of Compa&ntilde;ia Siderurgica del Pacifico, S.A. de C.V., Comercializadora Msan S.A. de C.V.,
Comercializadora de Productos de Acero de Tlaxcala, S.A. de C.V. and Productos Siderurgicos Tlaxcala, S.A. de C.V. held on November
30, 2013 and with date of December 2, 2013, Comercializadora Simec, S.A. de C.V., Siminsa E, S.A. de C.V. and Siderurgica de Baja
California, S.A. de C.V. was authorized the merger of all these companies, subsisting the first company and extinguishing all the
others.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>3.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Application of
new and amended standards and interpretations and standards not yet in force</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 35pt; text-align: justify">The consolidated financial statements
of Grupo Simec, S.A. de C.V. and subsidiaries for the periods presented have been prepared in accordance with International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). IFRS also include all International Accounting
Standards (IAS) and all the related interpretations issued by the IFRS Interpretations Committee, including those previously issued
by the Standing Interpretations Committee. The Company applied IFRS in effect at December 31, 2015.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 35pt; text-align: justify">The IASB issued the new IFRS mentioned
below, which are effective for the annual periods described therein.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 35pt; text-align: justify">Amendments that
will be applicable in 2016:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IAS 16
and IAS 38 &quot;Intangible Assets&quot; (&quot;IAS 38&quot;)</FONT></TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">The IASB issued the amendments and new IFRS mentioned below, which are effective
for the annual periods described therein.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">The amended IAS 16 prohibits entities from using revenue-based depreciation
methods for items in property, plant and equipment.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">The amended IAS 38 introduces a rebuttable presumption that revenue is not
an appropriate basis for amortization of an intangible asset. This presumption can only be rebutted in two limited circumstances:
a) the intangible asset is expressed as a measure of revenue; or b) ordinary revenue and the life of the assets are highly associated.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">The expected future reductions in selling prices could be indicative of a
reduction of the future economic benefits embodied in an asset.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">These amendments will be applied prospectively for annual periods beginning
on or after January 1, 2016, and early application is permitted.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13pt 0 14.2pt; text-align: justify; text-indent: 0.5in">&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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IFRS 11,
&quot;Joint Arrangements&quot; (&quot;IFRS 11&quot;) </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">The amendments to IFRS 11 address how a joint operator should account for
the acquisition of an interest in a joint operation that constitutes a business. IFRS 11 now requires that such transactions be
accounted for using the related principles to business combination accounting established in IFRS 3, &quot;Business Combinations&quot;
(&quot;IFRS 3&quot;), and additionally requires certain related disclosures.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">These amendments also apply when a business is contributed to the joint operation
upon its creation. The most significant impact of the amendments to IFRS 11 will be the recognition of goodwill (when there is
an excess of the transferred consideration over the identifiable net asset) and the recognition of deferred tax assets and liabilities.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">These amendments will be applied prospectively for annual periods beginning
on or after January 1, 2016. Early application is permitted.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify; text-indent: 0.5in"><BR CLEAR="ALL">
</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IFRS 10
and IAS 28, &quot;Investments in Associates and Joint Ventures&quot; (&quot;IAS 28 (2011)&quot;) </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
to IFRS 10 address an identified inconsistency between the requirements of IFRS 10 and IAS 28 (2011) in the treatment of the sale
or contribution of assets from an investor to an associate or joint venture.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The primary
result of the amendments is that a gain or loss is recognized when such a transaction involves a business (whether or not it is
a subsidiary). A gain or partial loss is recognized when the transaction involves assets that do not constitute a business, even
if such assets are allocated to a subsidiary.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">In December
2015, the IASB decided to defer indefinitely the effective date of this amendment.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 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: Arial, Helvetica, Sans-Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IFRS 5,
&quot;Non-Current Assets Held-for-Sale and Discontinued Operations&quot; (&quot;IFRS 5&quot;)</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
to IFRS 5 introduce specific guidance for the reclassification of an asset from held-for-sale to held-for&ndash;distribution-to-owners
(or vice versa) or the discontinuation of held-for-distribution accounting.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
state that:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Such reclassifications should not be considered changes to a plan of sale
or a plan of distribution to owners and that the classification, presentation and measurement requirements applicable to the new
method of disposal should be applied; and</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Assets that no longer meet the criteria for held-for-distribution-to-owners
(and do not meet the criteria for held-for-sale) should be treated in the same manner as assets that cease to be classified as
held-for-sale.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
apply prospectively and are effective for periods beginning on or after January 1,&nbsp;2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13pt 0 14.2pt; text-align: justify; text-indent: 0.5in">&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: Arial, Helvetica, Sans-Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IFRS 7,
&quot;Financial Instruments: Disclosures&quot; (&quot;IFRS 7&quot;)</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
to IFRS 7 provide additional guidance to clarify whether a servicing contract constitutes continuing involvement in a transferred
asset for purposes of the required disclosure relating to transferred assets.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
apply retrospectively; however, to avoid the risk of hindsight affecting the determination of the required fair value disclosure,
an entity is not required to apply the amendments to any period beginning prior to the annual period during which the amendments
are first applied. The amendments also include an amendment to IFRS 1, &quot;First Time Adoption of International Financial Reporting
Standards.&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
are effective for periods beginning on or after January 1, 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">Applicability
of the Amendments to IFRS 7 on Offsetting Disclosure to Condensed Interim Financial Statements</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
to IFRS 7 were made to eliminate uncertainty as to whether the disclosure required for offsetting financial assets and financial
liabilities (introduced in December 2011 and effective for periods beginning on or after January 1, 2013) should be included in
condensed interim financial statements after January 1, 2013 or only in the first year. The amendments clarify that such disclosure
is not explicitly required for all interim periods. However, the disclosure may need to be included in condensed interim financial
statements to comply with IAS 34.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
apply retrospectively in accordance with IAS 8, &quot;Accounting Policies, Changes in Accounting Estimates and Errors&quot; (&quot;IAS
8&quot;) and are effective for periods beginning on or after January 1, 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 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: Arial, Helvetica, Sans-Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IAS
19, &quot;Employee Benefits&quot; (&quot;IAS 19&quot;)</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
to IAS 19 clarify that investment-grade corporate bonds used to estimate the discount rate for post-employment benefits should
be issued in the same currency as the benefits to be paid. These amendments also provide for the assessment of the depth of the
market for investment-grade corporate bonds at the relevant currency level.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
apply retrospectively in accordance with IAS 8 and are effective for periods beginning after January 1, 2016, with earlier application
permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify; text-indent: 0.5in">&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: Arial, Helvetica, Sans-Serif">g.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amendments to IAS
34, &quot;Interim Financial Reporting&quot; (&quot;IAS 34&quot;) </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
to IAS 34 clarify the requirements relating to information required by IAS 34 that is presented &quot;elsewhere in the interim
financial report&quot; but is not included in the interim financial statements. The amendments require the inclusion of a cross-reference
from the interim financial statements to the location of such information in the interim financial report, which must be available
to users on the same terms and at the same time as the interim financial statements.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
apply retrospectively in accordance with IAS 8 and are effective for periods beginning after January 1, 2016, with earlier application
permitted.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">Amendments
that will be applicable in 2017:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">a.</TD><TD STYLE="text-align: justify; padding-right: 13.05pt">IAS 12 &quot;Income Taxes: Recognition of Deferred Tax Assets for Unrealized
Losses&quot; (IAS 12)</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">IASB issues
amendments to IAS 12 to clarify the diversity of practices in the recognition of deferred tax assets for unrealized losses related
to debt instruments measured at fair value. The amendments to IAS 12 include some explanatory paragraphs and an illustrative example.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The amendments
clarify the following aspects:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13.05pt">Unrealized losses on debt instruments measured at fair value for accounting
purposes and measured at cost for tax purposes give rise to deductible temporary difference regardless of whether the debt instrument's
holder expects to recover the carrying amount of the debt instrument by sale or by use.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13.05pt">The carrying amount of an asset does not limit the estimation of probable
future taxable profits.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13.05pt">Estimates for future taxable profits exclude tax deductions resulting from
the reversal of deductible temporary differences.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77.95pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13.05pt">An entity assesses a deferred tax asset in combination with other deferred
tax assets. Where tax law restricts the utilization of tax losses, an entity would assess a deferred tax asset in combination with
other deferred tax assets of the same type.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The amendments
are to be applied retrospectively and are effective for annual periods beginning on or after 1 January 2017. Earlier application
is permitted.</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">b.</TD><TD STYLE="text-align: justify; padding-right: 13pt">Amendments to IAS 7 &quot;Statement of Cash Flows&quot; (IAS 7)</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The IASB issued
amendments to IAS 7. The amendments are intended to clarify IAS 7 to improve information provided to user of financial statements
about an entity's financing activities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Changes</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The amendments
in IAS 7 come with the objective that entities shall provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">To achieve this
objective, the IASB requires that the following changes in liabilities arising from financing activities are disclosed: (i) changes
from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or other businesses; (iii) the
effects of changes in foreign exchange rate; (iv) changes in fair values; and (v) other changes.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The IASB defines
liabilities arising from financing activities as liabilities &quot;for which cash flows were, or future cash flows will be, classified
in the statements of cash flows as cash flows from financing activities.&quot; It also stresses that the new disclosure requirements
also relate to changes in financial assets if they meet the same definition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The amendments
state that one way to fulfill the new disclosure requirements is to provide a reconciliation between the opening and closing balances
in the statement of financial position for liabilities arising from financing activities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Finally, the amendments
state that changes in liabilities arising from financing activities must be disclosed separately from changes in other assets and
liabilities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">The amendments
are effective for annual periods beginning on or after 1 January 2017. Earlier application is permitted. Entities need not provide
comparative information when they first apply the amendments.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 56.7pt; text-align: justify; text-indent: 0">Amendments effective
for periods beginning in 2018:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">a.</TD><TD STYLE="text-align: justify; padding-right: 13pt">IFRS 9, &quot;Financial Instruments&quot;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The IASB issued
IFRS 9 (2009) and IFRS 9 (2010), which introduced new classification and measurement requirements. In 2013, the IASB released a
new model for hedge accounting. The final version of IFRS 9, which was issued in July 2014 (&quot;IFRS 9 (2014)&quot;), replaces
the previous versions of IFRS 9 and completes the IASB's project to replace IAS 39, &quot;Financial Instruments.&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The package of
improvements introduced by IFRS 9 (2014) includes a logical model for classification and measurement, a single, forward-looking
&quot;expected loss&quot; impairment model and a substantially reformed approach to hedge accounting.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">IFRS 9 (2014)
is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted. Additionally, the new
standards relating to credit risk may be applied early and in isolation, without adopting other modifications to the recognition
of financial instruments.</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Classification
and Measurement</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Classification
under IFRS 9 (2014) determines how financial assets and liabilities are recognized in financial statements and, in particular,
how they are measured on an ongoing basis. IFRS 9 (2014) introduces a logical approach to the classification of financial assets,
which is based on the cash flow characteristics of the financial asset and the entity's business model for managing the financial
assets. This principle-based approach replaces the existing classification and measurement requirements.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Impairment</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">As part of IFRS
9 (2014), the IASB introduced a new, single impairment model that is applicable to all financial instruments and eliminates the
complexity associated with multiple impairment models. The new impairment model requires an entity to recognize expected credit
losses on a timelier basis and to update the amount of expected losses throughout the useful life of a financial instrument. Additional
disclosure is required to describe the basis for recognizing expected credit losses and any changes in the estimated amount of
expected credit losses.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Hedge Accounting</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">IFRS 9 (2014)
includes significant changes to hedge accounting, such as new disclosure requirements that require a description of an entity's
risk management activities. The new model represents a comprehensive review of hedge accounting and aligns the accounting with
risk management in order to better reflect risk management activities in the financial statements. These changes are intended to
provide better disclosure about the risks that an entity faces and the impact of risk management activities on its financial information.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Credit Risk</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">IFRS 9 (2014)
also aims to eliminate the volatility in financial results caused by changes in the credit risk of liabilities that are measured
at fair value. Under IFRS 9 (2014), earnings from the impairment credit risk of liabilities are recognized in other comprehensive
income rather than directly in profit or net loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13pt 0 14.2pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">b.</TD><TD STYLE="text-align: justify; padding-right: 13pt">IFRS 15, &quot;Revenue from Contracts with Customers&quot; (&quot;IFRS 15&quot;)</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">IFRS 15 describes
a single comprehensive model for the accounting of revenue from contracts with customers and replaces the current guidelines on
revenue recognition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The core principle
of the new IFRS 15 is that an entity should recognize revenue to represent the promised transfer of goods or services to the customer,
valued at the amount that the entity expects to be entitled in exchanged for those goods or services.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">Pursuant to IFRS
15, an entity should:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Identify customer contracts that fall within the scope of the new standard;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Identify the separate performance obligations in the contract based on the
following criteria: a) sales of goods or services, separately, b) sales that are dependent or interrelated with other products
or services; and c) homogeneous and consistent sales pattern;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Determine the price of the transaction by applying the following considerations:
a) variable consideration and constraining estimates of variable consideration; b) the existence of a significant financing component
in the contract; c) any non-cash consideration; and d) the consideration payable to the customer;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Allocate the transaction price to each separate performance obligation; and</TD></TR></TABLE>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify; padding-right: 13pt">Recognize revenue when (or as) each performance obligation is satisfied either
over time or at a point in time.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The new IFRS 15
enhances disclosures of revenue. This standard must be applied for periods beginning on or after January 1, 2018, and early application
is permitted. During the year of application, entities may apply the rule retrospectively or use a modified approach.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13pt 0 14.2pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">New IFRS applicable
in 2019:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">IFRS 16, &quot;Leases&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">On January 2016,
the IASB published a new accounting standard, IFRS 16 Leases (IFRS 16), which replaces IAS 17 Leases and Guide interpretation.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The main changes
from the previous standard are:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">i.</TD><TD STYLE="text-align: justify; padding-right: 13pt">IFRS 16 provides a comprehensive model for the identification of the lease
arrangements and their treatment in the financial statements of both lessees and lessors;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">ii.</TD><TD STYLE="text-align: justify; padding-right: 13pt">The new standard applies a control model to the identification of leases,
distinguishing between leases and service contracts on the basis of whether there is an identified asset controlled by the customer;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">iii.</TD><TD STYLE="text-align: justify; padding-right: 13pt">The distinction between financial and operating leasing is removed, therefore,
assets and liabilities are recognized in respect of all leases, with some exceptions for short-term leases and leases of low value
assets;</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 21.25pt">iv.</TD><TD STYLE="text-align: justify; padding-right: 13pt">The standard does not include significant changes to the requirements for
accounting by lessors.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.05pt 0 78pt; text-align: justify; text-indent: 0">The standard is
effective for annual periods beginning on or after January 1, 2019, with earlier application permitted for entities that have also
adopted IFRS 15 Revenue from Contracts with Customers.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 0 35pt; text-align: justify">Simec has that these new standards
will have no important impact on its financial statements.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13pt 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: Arial, Helvetica, Sans-Serif"><B>4.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Basis for the preparation
and presentation of the financial statements</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><B><I>Basis of preparation </I></B><I>&ndash;<B>
</B></I>The consolidated financial statements have been prepared in accordance with the provisions of Note 3 on the historical
cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><B><I>Basis of consolidation
</I></B>&ndash; 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: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 9pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.7pt 0 35.3pt; 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 (ie, reclassified to profit or transferred directly to retained earnings) 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: 9pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2015 and 2014,
the subsidiaries of Grupo Simec, S.A.B. de C.V. included in the consolidation are as follows.</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-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: 5.4pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 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 Arial, Helvetica, Sans-Serif"><B>Percentage of equity owned</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 70%; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Subsidiaries established in Mexico:</B></FONT></TD>
    <TD STYLE="width: 11%; border-bottom: Black 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 Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="width: 8%; font: 9.5pt Book Antiqua, Times, Serif; padding-right: -4.55pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 11%; border-bottom: Black 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 Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Compa&ntilde;ia Siderurgica de Guadalajara, 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 Arial, Helvetica, Sans-Serif">99.99%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">99.99%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Arrendadora 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 Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Simec International, 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 Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Compa&ntilde;ia Siderurgica del Pacifico, 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 Arial, Helvetica, Sans-Serif">99.99%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Coordinadora de Servicios Siderurgicos de Calidad, S.A. de C.V. (11)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: justify; text-indent: -5.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Industrias del Acero y del Alambre, 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 Arial, Helvetica, Sans-Serif">99.99%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Operadora de Servicios Siderurgicos 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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Administradora de Servicios Siderurgicos 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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">CSG Comercial, 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 Arial, Helvetica, Sans-Serif">99.95%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">99.95%</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 Arial, Helvetica, Sans-Serif">Operadora de Servicios de la Industria Siderurgica ICH, 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 Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Corporacion Aceros DM, S.A. de C.V. and subsidiaries&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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Acero Transportes San, S.A. de C.V. (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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec Acero, S.A. de C.V. (11)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Corporacion 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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec International 6, S.A. de C.V. (11)&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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec International 8, S.A. de C.V. (2)</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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec International 9, S.A.P.I. 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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Corporativos G&amp;DL, S.A. de C.V. (11)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Orge, S.A. de C.V.&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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Siderurgica del Occidente y Pacifico, S.A. de C.V.&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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">RRLC, S.A.P.I. de C.V. (9)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">95.10%</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">&nbsp;</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 Arial, Helvetica, Sans-Serif">Grupo Chant, S.A.P.I. de C.V. (9)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">97.61%</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">&nbsp;</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 Arial, Helvetica, Sans-Serif">Aceros Especiales Simec Tlaxcala, S.A. de C.V. (10)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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">&nbsp;</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 Arial, Helvetica, Sans-Serif">Recursos Humanos de la Industria Siderurgica de Tlaxcala, S.A. de C.V. (10)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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">&nbsp;</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">&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: 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">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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 Arial, Helvetica, Sans-Serif"><B>Subsidiaries established in foreign countries:</B></FONT></TD>
    <TD STYLE="padding-right: 8.55pt; 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: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 8.55pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right">&nbsp;</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 Arial, Helvetica, Sans-Serif">SimRep Corporation and Subsidiaries (4) (5) (6) (11)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">50.22%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">50.22%</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 Arial, Helvetica, Sans-Serif">Pacific Steel, Inc. (5)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Pacific Steel Projects, Inc. (5)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec Steel, Inc. (5)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec USA, Corp. (5)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">100.00%</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: 5.4pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Simec International 8, Inc. (2) (5)</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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">Undershaft Investments, NV. (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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">GV do Brasil Industria e Comercio de A&ccedil;o LTDA (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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">GS Steel B.V. (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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">100.00%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Companies located
in San Luis Potosi. For purposes of this report constitute the &ldquo;Grupo San&rdquo;. This Company includes two subsidiaries
that in 2014 changed its address and tax residence to the California State in USA. These subsidiaries are Steel Promotor, Inc.
and Coadm Steel, Inc., and in 2015 they merged with Simec USA, Corp.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Company established
in 2014 in Mexico, and changed its address and tax residence to California State in USA during 2014 and in 2015 merged with Simec
USA, Corp. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Company established
in Netherlands in 2014.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(4)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">ICH (Holding Company)
owns 49.78% of the shares in this company.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(5)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Business established
in the United States of America, except a subsidiary of SimRep which is established in Canada.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(6)</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">SimRep as an individual company has no significant operations or assets,
other than its investment in Republic Steel. For purposes of this report, these companies are named &ldquo;Republic&rdquo;.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(7)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Company established
in Cura&ccedil;ao.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(8)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Company established
in Brazil in 2010, in which the Company is building a steel plant and starting partial operations in end of 2015. The investment
of the Company is approximately USD$&nbsp;267 and USD$&nbsp;260 million at December 31, 2015 and 2014 respectively.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(9)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Companies acquired
in 2015.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(10)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Companies incorporated
in 2015.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(11)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Companies that have
lost the entire share capital, except Corporativos G&amp;DL, S.A. de C.V., who have only lost more than two thirds of its capital.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(12)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">In 2016 they have
formed the following subsidiaries in Mexico: GSIM de Occidente, S.A. de C.V., y Fundiciones de Acero Estructural, S.A. de C.V.</FONT></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><B>Summary of significant accounting
policies</B> &ndash;Preparation of accompanying consolidated financial statements requires management of the Company 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 those mentioned below:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Translation
of financial statements of foreign subsidiaries </I></B><I>&ndash;<B> </B></I>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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The U.S. dollar (US Dollar or
USD$) is considered as the functional currency of the U.S. subsidiaries (except Simec International 8, Inc., Steel Promotor, Inc.
and Coadm Steel, Inc. subsidiaries of Corporacion Aceros DM, S.A. de C.V., until it&rsquo;s merged in 2015) 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">The exchange rates
at the balance sheet date to all assets and liabilities.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">The historical exchange
rate at stockholders&rsquo; equity accounts and revenues, costs and expenses.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 cumulative translation
effects of foreign subsidiaries.</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Mexican peso was considered
until 2014 the functional currency of the Company&rsquo;s USA subsidiaries, Simec International 8, Inc., Steel Promotor, Inc. and
Coadm Steel, Inc. 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">Monetary assets and
liabilities by applying the exchange rates at the balance sheet date.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 78pt; text-align: justify">Translation differences were carried
directly to the consolidated statement of comprehensive income (loss) as part of the income of the year under the caption foreign
exchange gain (loss).</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: 74%; padding-right: -2.5pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current exchange rate as of December 31, 2015</FONT></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">17.34</FONT></TD>
    <TD STYLE="width: 5%; padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.5pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current exchange rate as of December 31, 2014</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">14.73</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.5pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Weighted average exchange rate for the year ended December 31, 2015 (*)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">15.85</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.5pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Weighted average exchange rate for the year ended December 31, 2014 (*)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">13.29</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.5pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Weighted average exchange rate for the year ended December 31, 2013 (*)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">12.77</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: -2.5pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current exchange rate as of September, 19&nbsp;&nbsp;&nbsp;of 2016</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">19.15</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">(*)</TD><TD STYLE="text-align: justify; padding-right: 13.9pt">Exchange rate used to translate revenues, costs and expenses of the companies
mentioned above.</TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Business combinations
</I></B><I>&ndash;<B> </B></I>Acquisitions of subsidiaries and 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></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 </P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>c.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Cash and cash
equivalents and other investments </I></B><I>&ndash;<B> </B></I>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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Temporary investments in an equity
instruments for trading are measured at its fair value prevailing at the date of the financial statements. Subsequent changes in
the fair value are recognized in profit or loss.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>d.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Allowances for
doubtful accounts</I></B><I> &ndash;<B> </B></I>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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>e.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Inventories
and cost of sales </I></B><I>&ndash;<B> </B></I>Inventories are stated at the lower of cost or net realizable value. The cost allocation
formula used is the average cost. The cost includes acquisition costs of materials, labor and overhead costs related to manufacturing
and distribution, based on normal activity levels. The net realizable value represents the estimated selling price for inventories
less all estimated costs of completion and other necessary to make the sale, which is recorded in the statement of financial position
and against account is the cost of sales.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify"></P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-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 period, 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Company classified as long-term
inventory parts and rollers, according to historical data and trends showing that such inventories will not be consumed in the
short-term. The Company utilizes coke, a form of coal, as a raw material input to fuel its blast furnace (see Note 9). The Company
has 231,942 metric tons (MT) of coke inventory valued at 968 million Mexican pesos (average of USD$ 240.38/MT) on hand at December
31, 2015 and 228,996 MT of coke inventory valued at 1,518 million Mexican pesos (average of USD$ 450.00/MT) on hand at December
31, 2014 that is classified as long-term in the accompanying Consolidated Statements of Financial Position.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 (including Coke) with a turnover
above one year, which is recorded in the statement of financial position and against account is the cost of sales.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">The cost of sales of the Company
includes inventory costs, outbound freight charges, purchasing and receiving costs, inspection costs, and warehousing costs in
cost of goods sold. Vendor payment incentives are recorded as a reduction to cost of goods sold.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>f.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Property</I>,
<I>plant and equipment</I> <I>&ndash;</I> </B>Property, 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%">&nbsp;</TD>
    <TD STYLE="width: 23%; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Buildings</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">10 to 65</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Machinery and equipment</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5 to 40</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Transportation equipment</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Furniture, mixtures and computer equipment</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3 to 10</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Repair and maintenance costs
that significantly increase productive capacity or extend the useful lives of existing plant and equipment are capitalized. Supplies,
comprising of spare parts and consumables for internal use are classified under property, plant and equipment and expensed as incurred
in the manufacturing process. All other repair and maintenance costs are expensed as incurred. Capital expenditures for projects
that cannot be put into use immediately are included in constructions and machinery in-progress. When constructions and machinery
in-progress are completed, they are transferred to depreciable assets.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>g.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Leases </I></B><I>&ndash;<B>
</B></I>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>

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

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

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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>

&nbsp;
<TABLE CELLPADDING="0" CELLSPACING="0" 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: Arial, Helvetica, Sans-Serif"><B>h.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Borrowing</I></B>
<B><I>costs</I></B> <I>&ndash;</I> 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>i.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">The intention to complete
the intangible asset and use or sell it.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">The ability to use
or sell the intangible asset.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">How the intangible
asset will generate probable future economic benefits.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">The ability to measure
reliably the expenditure attributable to the intangible asset during its development.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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 </P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>j.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>k.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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. For purposes of allocation of goodwill when there
is business combination will be distributed among each of the cash generating units of the acquiring entity, expected synergy benefits.
A reversal of an impairment loss is recognized immediately in profit or loss and allocated to the assets of that unit, the carrying
amount of an asset other than goodwill attributable to a reversal of an impairment loss of value shall not exceed the carrying
amount that would have been obtained if had not recognized an impairment loss in value for the asset in prior periods. Unless the
related asset is recognized 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 0; 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: Arial, Helvetica, Sans-Serif"><B>l.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Provisions</I></B>
&ndash; 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></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>m.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Employee benefits
</I></B><I>&ndash;<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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 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 Times New Roman, Times, Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Republic operates various employee
benefit plans. The contributions to these benefit plans are either contractually determined by the terms of a collective bargaining
agreement with the United Steelworkers or fall under the terms of a defined contribution plan. Accordingly, the company pays fixed
contributions into separate entities and they are expensed in the period in which the employees rendered the services entitling
them to the benefits.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>n.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Earnings per
share </I></B><I>&ndash;</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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>o.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Income taxes</I></B><I>
&ndash; </I>Income taxes represents the sum of the tax currently payable and deferred tax.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 until 2013 (IETU)
(See Note 15), are recorded in the results of the year in which they are incurred. The ISR currently payable is based on taxable
profit for the year and IETU in cash flows of each year. 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B><I>Deferred tax</I></B>
&ndash;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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 </P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 78pt; text-align: justify">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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 78pt; text-align: justify">The Company follows the practice
of recognizing the benefit from the amortization of acquired or generated tax losses in current earnings that are amortized.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 in 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>p.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">Exchange differences
on transactions entered into in order to hedge certain foreign currency risks and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>q.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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 liabilities 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>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>r.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 </P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 are measured at amortized cost
using the effective interest method, less any impairment.</P>

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

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">Significant financial
difficulty of the issuer or counterparty; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">Breach of contract,
such as a default or delinquency in interest or principal payments; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">It becoming probable
that the borrower will enter bankruptcy or financial re-organization; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">The disappearance
of an active market for that financial asset because of financial difficulties.</FONT></TD></TR></TABLE>

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

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>

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

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

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 that continues to
recognize under continuing involvement, and the part that 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>s.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">It is a derivative
that is not designated and effective as a hedging instrument.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">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:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">Such designation eliminates
or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: 56.9pt"></TD><TD STYLE="width: 21.6pt">-</TD><TD STYLE="text-align: justify; padding-right: 13.7pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>t.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Derivative financial
instruments &ndash; </I></B>The Company sometimes 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>

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

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

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>u.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Revenue recognition</I>
</B><I>&ndash;</I><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</FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">to customers in fulfilling their
orders (which coincides with the time of shipment). Net sales represent the goods sold at list price, less returns received and
discounts.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>v.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Financial information
by operating segment - </I></B>An operating segment is a identifiable component of the Company that has in business activities,
from which it may earn revenues and incur expenses, including those income and expenses related to transactions with other components
of the entity and upon which the company has separate financial information that is evaluated regularly by the Board of Directors,
in making decisions to allocate resources and assess segment performance.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>w.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Environmental
liabilities - </I></B>The Company and other steel companies are subject to stringent environmental laws and regulations. It is
the policy of the Company to endeavor to comply with applicable environmental laws and regulations. The Company established a liability
for an amount which the Company believes is appropriate, based on information currently available, to cover costs of environmental
remediation it deems probable and estimable. The liability represents an estimate of the environmental remediation costs associated
with the required future steps of remediation, based upon management's evaluation of probable outcomes. These estimates are based
on currently available facts, existing technology and presently enacted laws and regulations. The precise timing of remediation
activities cannot be reliably determined at this time due to the absence of any deadlines for remediation under the applicable
environmental laws and regulations pursuant to which such remediation costs will be expended. Accordingly, the Company has not
discounted its environmental liabilities. No claims for recovery are netted against the recorded liabilities.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>x.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Cost of sales
and expenses by function - </I></B>The Company classifies its costs and expenses by function in the Consolidated Statements of
Comprehensive Income, according to the industry practices where the Company operates.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>5.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Critical accounting
judgments and key sources of estimation uncertainty</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">In the application of the Company&rsquo;s
accounting policies, which are described in Note 4, 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 Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Critical
                                         accounting judgments</I></B> <FONT STYLE="font-weight: normal">&ndash;</FONT> <FONT STYLE="font-weight: normal">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></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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">-</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Functional currency</I></B>
<I>&ndash;</I> 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. Likewise, the Company has concluded that the functional currency
of the companies located abroad are those mentioned in Note 4-a.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Key
                                         sources of estimation uncertainty</I></B><FONT STYLE="font-weight: normal"> <I>&ndash;
                                         </I>The 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></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 </FONT></TD></TR></TABLE>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 78pt; text-align: justify">receivable
aging and other considerations for specific
accounts.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 or liquidation value (fair value).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B><I>Estimating useful
lives and residual values of furniture and equipment</I></B> &ndash; As described in Note 4, 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B><I>Employee Benefits
</I></B>- The valuation of employee benefits is carried out by independent actuaries based on actuarial studies. Among others,
the following assumptions, which can have an effect are used:(I) discount rates, (ii) the expected growth rates of wages and iii)
turnover rates and mortality recognized tables. </FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 78pt; text-align: justify">A change in the economic, employment
and fiscal conditions could modify the estimates.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-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 not 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B><I>Valuation of
financial instruments &ndash;</I></B>The Company has certain types of derivative 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 derivative
financial instruments. At December 31, 2015 and 2014 the Company has not derivative financial instruments.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>6.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Cash and cash equivalents
and other investments</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Cash and cash equivalents are
as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Cash</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">787,038</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">888,013</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Cash equivalents (1)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,437,464</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: Arial, Helvetica, Sans-Serif">6,115,360</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6,224,502</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7,003,373</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Most of these cash
equivalents correspond to Treasury Bills issued by Treasury Department of USA, whose original maturity is less than three months.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Other investments included in
Consolidated Statements of Financial Position at December 31, 2015 amounting $&nbsp;374,359 ($&nbsp;305,085 at December 31, 2014) consists
in equity instruments for trading.</P>


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<P STYLE="font: 10pt Times New Roman, 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: Arial, Helvetica, Sans-Serif"><B>7.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Trade receivables
&ndash; Net</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.7pt 0 35.3pt; text-align: justify">The average credit period on sales
of goods is between 30 and 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Credit limits and scoring by
customer are reviewed twice a year. On December 31, 2015 there are no customers who represent more than 5% of the total balance
of trade receivables. At December 31, 2014, the situation was similar, except for a client of Republic which balance represents
11% of consolidated accounts receivable. 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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Age of receivables that are past
due but not impaired is as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>At December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; text-align: justify; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">30 - 60 days</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">116,580</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">124,217</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; text-align: justify; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">61 - 90 days</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">53,185</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">66,525</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; text-align: justify; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">91 + days</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">75,548</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">111,301</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">245,313</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">302,043</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">During the years ended December
31, 2015 and 2014, the movement in the allowance for doubtful accounts was as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance at beginning of year</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">49,434</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">146,155</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Provisions</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">33,313</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6,087</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Writes off </FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">(11,154)</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(105,827)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Translations effects</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,955</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,019</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance at end of year</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">75,548</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">49,434</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">In determining the recoverability
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>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Republic entered into an agreement
with an unrelated third-party (&ldquo;purchaser&rdquo;) for the factoring of specific accounts receivable in order to reduce the
amount of working capital required to fund such receivables. The agreement had 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.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">On the sale date, the purchaser
advances funds equivalent to 80% of the value of receivables. The factoring on this contract is recorded as a financing transaction
without reducing the trade receivables, applying the cash received to account payable. The maximum amount of outstanding advances
related to the assigned receivables was USD$&nbsp;30 million. Proceeds on the transfer reflect the 80% face value of the account.
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 15 days (of the advance date) to 3.75%
if paid within 90 days, and 1% for each 15 days additional until the account is paid. This discount fee is recorded as a charge
to interest expense in the Consolidated Statements of Comprehensive Income (Loss).</P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The purchaser has no recourse
against Republic if payments are not received due to insolvency of an account debtor within 120 days of the invoice date. However,
while the facility calls for the sale, assignment, transfer and conveyance of all rights, title and interests in the selected accounts
receivable, the purchaser may put and charge-back any receivable not paid to the purchaser within 90 days of purchase for any reason
besides insolvency of the account debtor.&nbsp;As collateral for the repayment of advances for receivables sold, the purchaser
has a priority security interest in all accounts receivable of the Company (as defined by the Uniform Commercial Code of the United
States of America).</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">During the years ended December
31, 2015 and 2014, the Company sold a nominal amount of USD $&nbsp;29.0 million and $ 33.9 million of accounts receivable, respectively.
The discount fees incurred by this contract were approximately USD $ 0.5 million in both years. As of December 31, 2015 and 2014
the buyer has USD$&nbsp;3,400,000 and USD$ 4,700,000, respectively, of receivables that have not been recovered by the buyer. The
amount uncollected 2015 is subject to a possible return of the Company by the buyer. These accounts receivable are included in
the total trade receivables for the purpose of assessing the recoverability of them and, where appropriate, determine the adequacy
of allowance for doubtful accounts.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>8.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Recoverable taxes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Valued Added Tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">896,919</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">517,441</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">53,177</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: Arial, Helvetica, Sans-Serif">42,335</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Business Flat Tax</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">14,911</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: Arial, Helvetica, Sans-Serif">18,257</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">965,007</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">578,033</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>9.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Inventories</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Short-term:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Finished goods</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">937,025</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,571,639</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Work in process</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">91,792</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">217,539</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Billet</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">2,851,579</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,418,041</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Raw materials and supplies</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">1,207,244</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,595,750</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Materials, spare parts and rollers</FONT></TD>
    <TD STYLE="vertical-align: bottom; 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: Arial, Helvetica, Sans-Serif">977,875</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">659,607</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Materials in transit</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">45,332</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="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">58,604</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6,110,847</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6,521,180</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Long-term:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Coke</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">966,780</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,396,284</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Spare parts </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: Arial, Helvetica, Sans-Serif">31,841</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: Arial, Helvetica, Sans-Serif">37,705</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">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: Arial, Helvetica, Sans-Serif">114,043</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: Arial, Helvetica, Sans-Serif">147,482</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Finished goods</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">726,097</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">257,471</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; 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: Arial, Helvetica, Sans-Serif">1,838,761</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: Arial, Helvetica, Sans-Serif">1,838,942</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; 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: 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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40.45pt; text-align: justify; text-indent: -5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Less, valuation allowance at cost or net realizable value, the lower.</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(353,095)</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: -3.7pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(135,360)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,485,666</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,703,582</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company has $&nbsp;966,780
and $&nbsp;1,396,284 of coke inventory on hand as of December 31, 2015 and 2014 respectively, which the Company would only use
as an input to its blast furnace in Lorain facility. Management of the Company continually evaluates both the idled facility and
the coke inventory for impairment. Management periodically evaluates the potential degradation of the coke inventory and has determined
that it continues to be suitable as a blast furnace input or, alternatively, for sale to other blast furnace facilities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>10.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Property, plant
and equipment </B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Cost of property, plant and
equipment is as follows (in million of Mexican pesos):</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 8.5pt 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: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Land</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Buildings</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 2.9pt; padding-left: 2.9pt">
        <P STYLE="font: bold 8.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">Machinery<BR>
and<BR>
equipment</P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Transportation<BR>
equipment</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Furniture,<BR>
mixtures and<BR>
computer<BR>
equipment</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Constructions<BR>
and<BR>
machinery<BR>
in-progress</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; padding-right: 2.9pt; padding-left: 2.9pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2.9pt; padding-left: 2.55pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-indent: -0.1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 8%; font: 8.5pt 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: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 6%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2013</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">952</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,152</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">16,716</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">158</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">139</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,450</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">22,567</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Acquisitions</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">12</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,846</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,858</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Transfers </FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">662</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(662)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Translation</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"> effects </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(24)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">43</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">593</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(5)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">95</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">706</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2014</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">928</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,207</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">19,817</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">153</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">143</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">883</FONT></TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">25,131</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Acquisitions</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">111</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">930</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,047</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Disposals</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(79)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(79)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Transfers </FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(31)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(368)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(399)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Translation</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"> effects </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(10)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">57</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">422</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">58</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">532</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2015</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,029</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,269</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">21,090</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">154</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">117</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">573</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">26,232</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">Accumulated depreciation of property,
plant and equipment is as follows (in million of Mexican pesos):</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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="font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Buildings</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 2.9pt; padding-left: 2.9pt">
        <P STYLE="font: bold 8.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">Machinery and<BR>
equipment</P></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Transportation<BR>
equipment</FONT></TD>
    <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Furniture,<BR>
mixtures and<BR>
computer<BR>
equipment</FONT></TD>
    <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 2.9pt; padding-left: 2.9pt">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.85pt; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2013</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">893</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">9,388</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">59</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">59</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">10,399</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Depreciation expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">26</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">827</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">8</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">864</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Translation effects</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">245</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">249</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2014</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">922</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">10,460</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">67</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">63</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">11,512</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 4.2pt; font-size: 8.5pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Depreciation expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">20</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">976</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,005</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Disposals</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(79)</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(79)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Impairment</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,072</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,072</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 2.9pt; padding-left: 11.25pt; font-size: 8.5pt; text-indent: -7.05pt"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Translation effects</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">11</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">579</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">593</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 4.2pt; text-indent: -4.2pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2015</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">953</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">14,008</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">74</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">68</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">15,103</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="width: 28%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The depreciation expense for
the years ended December 31, 2015, 2014 and 2013 amounted to $&nbsp;1,005,117, $&nbsp;863,689 and $ 806,402, respectively.</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The net book value of property,
plant and equipment is as follows (in million of Mexican pesos):</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 2.9pt; padding-left: 2.9pt; text-indent: -2.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Net Book Value:</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Land</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Buildings</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 2.9pt; padding-left: 2.9pt">
        <P STYLE="font: bold 8.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">Machinery and<BR>
</P>
        <P STYLE="font: bold 8.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">Equipment</P></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Transportation<BR>
equipment</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Furniture,<BR>
mixtures and<BR>
computer<BR>
equipment</FONT></P></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Constructions<BR>
and<BR>
machinery<BR>
in-progress</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font: bold 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 34%; padding-right: 2.9pt; padding-left: 2.9pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2.9pt; padding-left: 2.55pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-indent: -0.1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 8%; font: 8.5pt 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: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: -2.9pt; padding-left: 2.85pt; font: 8.5pt Arial, Helvetica, Sans-Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2013</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">952</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,259</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7,328</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">99</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">80</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,450</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">12,168</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-indent: -2.9pt">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2014</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">928</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,285</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">9,357</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">86</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">80</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">883</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">13,619</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-indent: -2.9pt">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.9pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2015</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -2.85pt; padding-left: 2.9pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,029</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,316</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7,082</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">80</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">49</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: -1.4pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.85pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">573</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 3.7pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font: 8.5pt Arial, Helvetica, Sans-Serif; padding-right: 0.85pt; padding-left: 2.9pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">11,129</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 6 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2014, Republic
has invested USD$158.8 million in an electric arc furnace and associated equipment at its steelmaking facility in Lorain, Ohio,
USA, 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 construction of the Lorain electric arc furnace began mid-year 2012 and the Company began steelmaking operations
in July 2014. The amount indicated includes USD $ 45.4 million capitalized from labor and indirect costs related to the construction
of the furnace and is presented in the investment in machinery and equipment.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">In June of 2015, Republic Steel
temporarily idled the newly constructed electric arc furnace at the Lorain facility in response to the severe economic downturn
in the energy exploration sector following the sharp drop in the price of oil which has led to significant market declines and
demand for product. As a consequence of this event management determined a triggering event took place to where the long-lived
assets at the Lorain facility may not be fully recoverable. Management performed an analysis of the fair value of the Lorain facility
with the assistance of an independent valuation firm and determined the net book value exceeded the fair value by approximately
USD$130.7 million and as such recognized an asset impairment of this amount during the year ended December 31, 2015. The fair value
determination at the Lorain facility was based on an independent valuation of the Lorain melt shop assets using the comparable
match method of the market approach to determine fair value. The income approach was not considered an appropriate fair value measurement
due to the absence of reliable forecast data as the facility was idled indefinitely in early 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The blast furnace, which operated
with coke as raw material mentioned in footnote 9 above, also located in Lorain plant and is not functioning from previous years.
An impairment has nevertheless been recorded to effectively write it down to zero value.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Subsequent
to year end, the entire Lorain facility was temporarily idled effective March 31, 2016 and </FONT> <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">at
the date of issuance, management has no near-term plans to restart the facility, and the expectation is that it will be restarted
when market conditions improve substantially, particularly in the oil and gas drilling industry. The Company has property, machinery,
and equipment with a net book value of approximately USD$&nbsp;32.2 million as of December 31, 2015, pertaining to the Lorain Ohio
facility after recording the impairment charge of USD$&nbsp;130.7 million as mentioned above. The impairment charge did not impact
the cash flows, as it was not a-cash expenditures. Management further assessed if there were any impairments at the Company's other
cash generating units and determined that as of December 31, 2015 no other cash generating units were impaired based on current
projections.</FONT> <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The Company continues to incur costs to maintain the
temporarily idled facility and coke (such costs are charged to period expense) in anticipation of bringing the facility back on
line. Restarting the facility will require certain expenditures to restore the equipment to productive status. However, there remains
significant uncertainty as to if and when the facility will be restarted and the Company cannot provide any assurances that it
will restart the facility at all or on economically feasible terms.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2015 and 2014,
the machinery and equipment includes a machine called Coss System, valued at $&nbsp;122,880 (which is equivalent to USD$&nbsp;9.9
million), plus related installation expenses in the amount of $&nbsp;22,079, which was installed in an industrial plant of the
subsidiary Aceros D.M., S.A. de C.V. (Grupo San). This machinery did not work in accordance with the specifications promised by
the supplier, so it is not in operation. Currently, actions are being taken for the recovery, through arbitration in the USA and
directly with the supplier Fuchs Technology, A.G, in the amount of USD$&nbsp;5.9 million, which is equivalent to the installation
expenses previously mentioned, plus damages. On the other hand, the supplier also has demanded the payment of the USD$&nbsp;9.9
million, since the Company has withheld payment for such machinery. As of the date of these consolidated financial statements,
such arbitration is favorable for Grupo Simec, S.A.B. de C.V. and Aceros D.M., S.A. de C.V., a subsidiary of Corporacion Aceros
DM, S.A. de C.V.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>11.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Intangible and
other non-current assets</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The balances as of December 31,
2015 and 2014 are as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="9" STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Amortization</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>period</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>(years)</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Assets</B></FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Original</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>value</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Accumulated</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>amortization</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Net</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Republic trade name</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">93,400</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">93,400</FONT></TD>
    <TD STYLE="padding-top: 3pt; 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: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Kobe Tech contract</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">108,848</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">94,486</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">14,362</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">12</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Customers list</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">57,016</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">29,696</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">27,320</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-top: 6pt; font-size: 9.5pt; text-indent: 0"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Total from Republic (1)</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">259,264</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">124,182</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">135,082</FONT></TD>
    <TD STYLE="padding-top: 6pt; 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: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Customers list</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,205,700</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,858,508</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">347,192</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Trademark San 42 (2)</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">329,600</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">329,600</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Goodwill (2)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,814,160</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,814,160</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-top: 6pt; font-size: 9.5pt; text-indent: 0"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Total from Grupo San (3)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; 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: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,349,460</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; 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: 3pt; 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: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,858,508</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; 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: 3pt; 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: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,490,952</FONT></TD>
    <TD STYLE="padding-top: 3pt; 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: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="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"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,608,724</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="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"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,982,690</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="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"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,626,034</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Other assets</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,066</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,066</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,632,790</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,982,690</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,650,100</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 32%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="9" STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Amortization</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>period</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>(years)</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Assets</B></FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Original</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>value</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 3.5pt">
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Accumulated</B></P>
        <P STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>amortization</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Net</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Republic trade name</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">79,368</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">79,368</FONT></TD>
    <TD STYLE="padding-top: 3pt; 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: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Kobe Tech contract</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">92,496</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">72,584</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">19,912</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">12</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Customers list</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">48,450</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">22,812</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">25,638</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-top: 6pt; font-size: 9.5pt; text-indent: 0"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Total from Republic (1)</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">220,314</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">95,396</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">124,918</FONT></TD>
    <TD STYLE="padding-top: 6pt; 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: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-top: 6pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Customers list</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,205,700</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,613,430</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">592,270</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Trademark San 42 (2)</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">329,600</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">329,600</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Goodwill (2)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,814,160</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,814,160</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">*</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Total from Grupo San (3)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 6pt; 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: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,349,460</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; 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: 3pt; 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: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,613,430</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; 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: 3pt; 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: 3pt; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,736,030</FONT></TD>
    <TD STYLE="padding-top: 3pt; 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: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt">&nbsp;</TD>
    <TD STYLE="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"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,569,774</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="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"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,708,826</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="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"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,860,948</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Payments in advance to Machinery and equipment vendors (See Note 25)</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">28,217</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">28,217</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-indent: -3.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Other assets</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">11,368</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">11,368</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,609,359</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: right; text-indent: 4.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,708,826</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-left: 3.5pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,900,533</FONT></TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center; text-indent: -2.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 3.5pt; font-size: 9.5pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 32%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 162; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<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: 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: Arial, Helvetica, Sans-Serif">Intangible assets
with undefined useful life.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Intangible assets
from Republic acquisition.</FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: 8pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Intangible assets
from Grupo San acquisition.</FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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, 2015, 2014 and 2013 amounts to $&nbsp;255,976, $&nbsp;254,217 and $&nbsp;246,498,
respectively.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The other assets are not subject
to amortization and they are primarily comprised of guarantee deposits.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The reconciliation between the
opening and closing balances of each year presented:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Assets</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Original</B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>value</B></P></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Accumulated amortization</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Net</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 45%; padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2013</FONT></TD>
    <TD STYLE="width: 3%; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 14%; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,660,799</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 14%; padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,443,955)</FONT></TD>
    <TD STYLE="width: 2%; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="width: 14%; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,216,844</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Additions</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,323</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(254,217)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(252,894)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Disposals</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(77,707)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(77,707)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Translation effects</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">24,944</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(10,654)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">14,290</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2014</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,609,359</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,708,826)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,900,533</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Additions</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">12,678</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(255,976)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(243,298)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Disposals</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(28,217)</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(28,217)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Translation effects</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">38,970</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(17,888)</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">21,082</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.5pt; padding-left: 3.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance as of December 31, 2015</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,632,790</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -2.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,982,690)</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.5pt; padding-left: 3.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,650,100</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>12.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Short-term debt</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">On October 22, 1997 and August
17, 1998, the Company offered the 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, 2015 and 2014, the amount of such new notes outstanding
totaled USD$&nbsp;0.3 million, plus accrued interest. At December 31, 2015 and 2014, liabilities in pesos for the new notes outstanding
amounted to $&nbsp;5,237 and $&nbsp;4,450, respectively.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>13.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Trade accounts
payable and other accrued liabilities</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Trade accounts payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,102,944</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,656,895</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 3.55pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other accrued liabilities</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">665,934</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: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">574,029</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,768,878</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,230,924</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 the 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>14.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Employee benefits</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><B><I>Mexican entities</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Collective bargaining
agreements </I></B><I>&ndash;</I> For the Mexican operations, approximately 53% (56% on 2014) of the employees are under collective
contracts. The Mexican collective contracts expire in periods greater than one year.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Seniority premium
benefits</I></B> <I>&ndash;</I><B> </B>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></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: 56.7pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</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: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; 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: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">6.75</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; 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: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6.75</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; 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: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7.25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">3.93</FONT></TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">3.93</FONT></TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">6.24</FONT></TD></TR>
<TR>
    <TD STYLE="width: 49%; padding-left: 56.7pt">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Components
of net cost of benefits plan to employees are as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 56.7pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</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: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; 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: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: 2pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current service cost</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,447</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,758</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,900</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">5,359</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,658</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,966</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">76</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">109</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Anticipated reduction obligations</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 COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(3,507)</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,367)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Actuarial losses (gains) 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: Arial, Helvetica, Sans-Serif">3,398</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,305)</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,061)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">13,204</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,680</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,547</FONT></TD></TR>
<TR>
    <TD STYLE="width: 48%; padding-left: 56.7pt">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The expense for the years 2015,
2014 and 2013 was recorded in:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 21.3pt; text-indent: -21.3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; padding-right: 13.85pt; padding-left: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; 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: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Cost of sales</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7,395</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,621</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,107</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 56.7pt; text-indent: -3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,809</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,059</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,440</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">13,204</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,680</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,547</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The amounts included in the Consolidated
Statements of Financial Position at December 31, 2015 and 2014 are $&nbsp;93,432 and $&nbsp;83,499 respectively, corresponding
to the present value of defined benefit obligation.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 57%; padding-right: 13.85pt; padding-left: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; 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: 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: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Opening defined benefit obligation</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">83,499</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">81,396</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">4,447</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,758</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-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">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">76</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">5,359</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,658</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Anticipated reduction obligations</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: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(3,507)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Actuarial losses (gains) </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: Arial, Helvetica, Sans-Serif">3,398</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,305)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Benefits paid</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(3,271)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(2,577)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Closing defined benefit obligation</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">93,432</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">83,499</FONT></TD></TR>
</TABLE>

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    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; padding-top: 6; padding-bottom: 6; border-bottom: Black 4pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 11pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></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: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Severance benefits
</I></B><I>&ndash;</I><B> </B>Further, in accordance with the Mexican labor laws, 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 (loss) 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></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Employee profit
sharing (EPS) </I></B><I>&ndash;</I><B> </B>The Mexican Constitution and the Labor Law grant employees the right to receive a 10%
share of the employers&rsquo; profits. Employees Profit Sharing is computed in similar terms to the taxable profit for income tax,
excluding amortization of tax losses. For the years 2015, 2014 and 2013, EPS amounted to $&nbsp;48, $&nbsp;79 and $ 632, respectively.
EPS is recorded in the results of operations for the year in which it is incurred.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Governmental
defined contribution plan </I></B><I>&ndash;</I><B> </B>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 2015, 2014 and 2013 was $&nbsp;9,323, $&nbsp;9,024 and $&nbsp;10,098, respectively.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify"><B>Foreign entities (Republic)</B></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Collective Bargaining
Agreements</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">As of December 31, 2014, 83% percent
of the Republic employees are covered by a collective bargaining agreement (labor agreement) with the United Steelworkers (USW).
The current agreement expires on August 15, 2016. The labor agreement includes general wage increases in 2013, 2014, and 2015.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Steelworkers Pension
Trust</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Republic participates in the Steelworkers
Pension Trust (SPT), a defined benefit multi-employer pension plan. Republic obligations to the plan are based upon fixed contribution
requirements. Republic contributes a fixed dollar amount of USD$1.68 per hour for each covered employee's contributory hours, as
defined under the plan.</P>

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">I.</TD><TD STYLE="text-align: justify; padding-right: 13.9pt">Contributions to the SPT by Republic may be used to provide benefits to
employees of other participating employers.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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">II.</TD><TD STYLE="text-align: justify; padding-right: 13.9pt">If a participating employer stops contributing to the SPT, the unfunded
obligations of the plan may be borne by the remaining participating employers; and</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt 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="color: windowtext">III.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="color: windowtext">If the </FONT>Republic<FONT STYLE="color: windowtext">
                                                                                                         chooses to stop participating in the SPT, </FONT>Republic <FONT STYLE="color: windowtext">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 Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Republic participation in the
SPT for annual periods ended December 31, 2015, 2014 and 2013 is outlined in the table below.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Pension Protection Act</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Surcharge</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Zone Status<SUP>(a)</SUP></B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Imposed<SUP>(c)</SUP></B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>FIP/RP Status</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>EIN/Pension</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Pending/</B></FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Pension Fund</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Plan Number</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>2014</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.7pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>Implemented<SUP>(b)</SUP></B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>2014</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 2pt; padding-left: 2pt; font-size: 8.5pt; text-indent: 0in; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: -2pt; padding-left: 2pt; font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Steelworkers Pension Trust</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">23-6648508/499</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Green</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Green</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">Green</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">No</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">No</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">No</FONT></TD>
    <TD STYLE="font-size: 8.5pt; text-align: center"><FONT STYLE="font: 8.5pt Arial, Helvetica, Sans-Serif">No</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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: 56.7pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(a)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The zone status is
based on information that Republic received from the plan and is certified by the plan's actuary. Among other factors: plans in
the green zone are at least 80% funded, plans in the yellow zone are less than 80% funded, and plans in the red zone are less than
65% funded.</FONT></TD></TR></TABLE>

<P STYLE="font: 7pt 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: 12pt 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: 10pt Arial, Helvetica, Sans-Serif">(b)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Indicates if a financial
improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented.</FONT></TD></TR></TABLE>

<P STYLE="font: 7pt 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: 12pt 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: 10pt Arial, Helvetica, Sans-Serif">(c)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Indicates whether there
were charges to Republic Steel from the plan.</FONT></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">Republic has not been listed
in the plans' Forms 5500 as providing more than five percent of the total contributions for any plan years.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 56.7pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">There
have been no significant changes that affect the comparability of 2015, 2014 and 2013 contributions. For the years ended December
31, 2015, 2014 and 2013, contributions to Steelworkers Pension Trust amounted to USD$&nbsp;5.3 million USD$&nbsp;5.8 million and
USD$&nbsp;5.7 million, respectively. Expiration of collective Bargaining Agreement is on August 15, 2016.</FONT> <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The
Parties have signed a Settlement Agreement for a new labor agreement that will be effective August 16, 2016 through August 15,
2019. That Settlement Agreement must be put to a vote and ratified by the Union. The final vote will be tallied within the next
few weeks. Given the fact that the Parties reached a signed Settlement Agreement, management believes a labor strike is extremely
unlikely.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>VEBA Benefit Trust</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">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 &quot;qualified&quot; plan under ERISA regulations.
For the years ended December 31, 2015, 2014 and 2013, recorded expenses of USD$ 10.4 million, USD$ 10.4 million and USD$ 10.4 million,
respectively, related to this welfare plan.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 56.7pt; text-align: justify">For the years ended December
31, 2015, 2014 and 2013, Republic recorded combined expenses of USD$&nbsp;15.7 million, USD$&nbsp;16.2 and USD$&nbsp;16.1 million,
respectively, related to the funding obligations of the retirement healthcare and pension benefits. Not expected to cost contributions
to these two funds benefits in 2016 exceed USD$ 15.7</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>401(k) Plans</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">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 Republic contributions and voluntary deferrals of employees' compensation.
Republic funds contributions to this plan each pay period based upon the participant's age and service as of January first of
each year. The amount of Republic 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. Republic
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 Republic matching 401(k) contributions. For the years ended December 31, 2015, 2014 and 2013,
Republic recorded expense of USD$&nbsp;1.7 million, USD$&nbsp;2.3 million and USD$ 2.5 million, respectively, related to this
defined contribution retirement plan.</P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 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' compensation. There are no Republic contributions or employer matching contributions relating to these employees.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 0; 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: Arial, Helvetica, Sans-Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Profit Sharing
and Incentive Compensation Plans</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">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 USD$ 50.0 million multiplied by 2.5%, USD$
50.0 million to USD$ 100.0 million multiplied by 3.0%, and above USD$ 100.0 million multiplied by 3.5%, less the previous payouts
during the year. For the years ended December 31, 2015, 2014 and 2013, Republic not made payments under this plan.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Republic has a profit sharing
plan for all salaried employees and nonunion workers. During 2013, the profit-sharing plan was based upon achieving certain inventory
and shipments targets. In the year ended December 31, 2015, Republic made no disbursements under this plan. In the years ended
December 31, 2014 and 2013, Republic paid USD$&nbsp;0.1 million and USD$ 0.4 million, respectively.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>15.</B></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Income taxes</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company is subject to Income
Tax (ISR) and Business Flat Tax until 2013 (IETU).</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Grupo Simec S.A.B. de C.V. and
some of its subsidiaries consolidated their taxable income with its parent company Industrias CH until 2013. In accordance with
the provisions of the Income Tax Law in force until December 31, 2013, Industrias CH and each of its subsidiaries determined their
taxes individually, and had the obligation to pay the minority portion of those taxes directly to the Mexican Tax Authorities.
The majority income tax, for consolidation purposes, was covered by the holding company. Grupo Simec, S.A.B. de C.V. and its subsidiaries
calculated and book its provision for taxes on a standalone basis.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">IETU was computed at the rate
of 17.5% until 2013. The tax base was 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 was paid only by the difference between the income tax and the business flat
tax caused when the latter was greater.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">On December 11, 2013 several
changes in the tax laws were published, which took effect on January 1, 2014.&nbsp;Among the most important changes are the following:</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 36.85pt; text-align: justify"><U>Income Tax (ISR)</U></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.3pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.8pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The Income Tax Law
was abrogated effective until December 31, 2013 and entered into force a new law.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.3pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.8pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Expenses that are
income exempt for the workers, including social security benefits, will be deductible for up to 53% of payments made, the difference
must be considered as non-deductible expense.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.3pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.8pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The income tax rate
will be 30% for the following years, instead of 29% that was envisaged by the Income Law of Federation for 2014 and 28% for 2015
and subsequent years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.3pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.8pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The taxable income
for determining Employees&rsquo; profit sharing (PTU) during the year will be calculated by subtracting the taxable income for
income tax purposes (before the deduction of PTU paid), the amount that was considered non-deductible for income tax purposes related
to exempt income of workers.</FONT></TD></TR></TABLE>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 36.85pt; text-align: justify"><U>Business Flat Tax (IETU)</U></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.3pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.8pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Business Flat Tax
Law is abrogated, so, only the ISR will be incurred. </FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 36.85pt; text-align: justify">Until December 31, 2012, some
subsidiaries of the Company had determined deferred Business Flat Tax, in accordance with the rules established so far; however,
derived from the abrogation of the Business of the Flat Tax Law to 2014, the Company canceled the deferred Business Flat Tax liability
reordered at December 31, 2012 for $ 276,762.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 36.85pt; text-align: justify">The analysis of the income tax
charged (credited) to the results of 2015, 2014 and 2013 is as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 36.85pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: -5.75pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -5.75pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 13.85pt; padding-left: 36.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; 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: 36.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">ISR of the year of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,571,766</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">277,907</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"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">54,744</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">IETU of the year of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; 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: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; 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: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,518</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Deferred ISR of Mexican companies </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: Arial, Helvetica, Sans-Serif">(185,540)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&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: Arial, Helvetica, Sans-Serif">(87,692)</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: 0.85pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7,224</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Deferred IETU of Mexican companies </FONT></TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -6.5pt; 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: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -6.5pt; 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: -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: Arial, Helvetica, Sans-Serif">(276,762)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">ISR of the year of foreign companies </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: Arial, Helvetica, Sans-Serif">26,469</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -6.5pt; 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: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -6.5pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Deferred ISR of foreign companies </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(642,123)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(28,218)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(69,292)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 50pt; text-align: justify; text-indent: -4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Income taxes</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">770,572</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -6.5pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">161,997)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(281,568)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The amount of income tax for
the year of the Mexican companies for 2015 includes $&nbsp;1,332,858 which was paid in Simec International 6, S.A. de C.V. and
Simec International 8, S.A. de C.V. and it is derived from a review initiated in July 2015 by differences in criteria with the
tax authority and that comes from the year 2010 by a deduction of losses on disposal of Treasury Bonds of the United States of
America, that deducted by the companies, and already have conclusive agreement between the Company, the Tax Administration Service
(SAT) and the Office of the Taxpayer Advocate (Prodecon) dated May 23, 2016.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">During 2015, 2014 and 2013, the
income tax expense (benefit) attributable to income before income tax was different from the one that will result for applying
30% (tax rate in Mexico) before these provisions, as a result of the concepts shown below:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 36.85pt; text-align: justify; text-indent: -3.15pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: -5.75pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -5.75pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 13.85pt; padding-left: 36.85pt; text-align: justify; text-indent: -3.15pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; 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="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Income tax (benefit) expense at statutory rate</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(747,102)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">203,975</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"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">212,409</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Increase (decrease) as a result of:</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">&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: -3.95pt; 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: -3.95pt; 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>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Inflation effects, net</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: Arial, Helvetica, Sans-Serif">34,264</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&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: Arial, Helvetica, Sans-Serif">(17,143)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(61,424)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Effect between nominal rate from USA and Mexico</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: Arial, Helvetica, Sans-Serif">(226,258)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(71,985)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(58,178)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Cancelation of deferred IETU</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">&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: -3.95pt; 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: -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: Arial, Helvetica, Sans-Serif">(274,244)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Benefit from utilization of tax loss carry-forward and&nbsp;others&nbsp;(1)</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: Arial, Helvetica, Sans-Serif">(38,562)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&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: Arial, Helvetica, Sans-Serif">(144,801)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(541,533)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Others, net (includes permanent items)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">415,377</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; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">191,951</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; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">441,402</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: 10pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Income tax expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(562,281)</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; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">161,997</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(281,568)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 36.85pt; text-indent: -3.15pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Effective tax rate (2)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(22.5%)</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; border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">23.80%</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; border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(39.80%)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(1)</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"></FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">This amount corresponds at the Income tax benefit obtained by those companies that amortized tax loss carry-forwards in the years presented and that were generated prior to 2015, 2014 and 2013, respectively, and were not registered the corresponding deferred tax asset, less the effect of
tax losses obtained for some subsidiaries in the years that are presented which no deferred tax asset was recorded.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The calculation of
the effective tax rate in 2015 did not include the charge of $&nbsp;1,332,858 that noted above.</FONT></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The Company has tax losses carry-forwards
in some Mexican subsidiaries which, according to the ISR law in Mexico, can be utilized against taxable income generated in the
next ten years. Tax loss carry-forwards can be updated by following certain procedures established in the law.</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">At December 31, 2015, Grupo
Simec, S.A.B. de C.V. and certain of its Mexican subsidiaries have tax loss carry-forwards. These tax losses which correspond to
Mexican entities shown below:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 70%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Origin </B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-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: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Settlement</B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-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: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Tax losses<BR>
pending of<BR>
amortization</B></FONT></TD>
    <TD STYLE="padding-right: -6.3pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 29%; padding-right: -3.45pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 7%; padding-right: 13.85pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 26%; padding-right: -3.45pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 23%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 4%; 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: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2018</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">51</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: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2019</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">37,373</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: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2020</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">31,059</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: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2021</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">9,308,045</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 7.5pt"><FONT STYLE="font: 7.5pt Arial, Helvetica, Sans-Serif">(3)</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: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2022</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,298</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 7.5pt">&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: Arial, Helvetica, Sans-Serif">2013</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: Arial, Helvetica, Sans-Serif">2023</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7,359</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: Arial, Helvetica, Sans-Serif">2014</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: Arial, Helvetica, Sans-Serif">2024</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">55,470</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: Arial, Helvetica, Sans-Serif">2015</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: Arial, Helvetica, Sans-Serif">2025</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.95pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">239,274</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: 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-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -3.95pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">9,682,929</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.05pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">This amount includes
$&nbsp;9,267,260 updated to December 31, 2015, corresponding to a tax loss obtained in a sale of shares which, according to the
Income Tax Law, can only be amortized against taxable profits on the sale of shares to be generated in the future.</FONT></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">At December 31, 2015, Republic
had USD$&nbsp;284.6 million of tax loss carry-forwards for federal tax purposes, which expire between 2030 and 2035; USD$&nbsp;343
million of tax loss carry-forwards for state and local purposes that expire between 2016 and 2034 and approximately USD$&nbsp;4.1
million of tax losses at the subsidiary located in Canada, which expire between 2030 and 2035. The timing of the reversal of these
temporary differences is uncertain and therefore cannot be assumed to occur before the aggregate NOLs expire. Due primarily to
Republic being in a three-year cumulative loss position as of December 31, 2015, and because the uncertainty in the market makes
for uncertain forecasting, the Company has determined that it is not more likely than not that any of its deferred tax assets will
be realized as benefits in the future. Consequently, the deferred tax assets recorded until December 31, 2014, in the amount of
$ 371,774 was canceled in 2015.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">At December 31, 2015, GV do Brasil
Industria e Comercio of A&ccedil;o LTDA, a subsidiary established in Brazil, had 146 million of Brazilian Reals ($&nbsp;650 million
of Mexican pesos) of tax losses carry forwards, which do not have an expiration date.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 included in the consolidated statements of financial
position.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">The primary items generating
a deferred ISR asset and liability are:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -3.55pt; padding-left: 3.55pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5&nbsp;&nbsp;</B></FONT></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: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.55pt; padding-left: 35.45pt">&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: 10%; 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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Allowance for doubtful accounts</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">20,768</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">32,496</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2,700</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">149,157</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">77,895</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">39,030</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Tax losses carry-forwards (1)</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: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">378,049</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 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-top: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 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: 13.85pt; padding-left: 60pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Deferred tax assets</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">101,363</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">598,732</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 35.45pt">&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: -3.7pt; 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: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -3.7pt; 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: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">607,827</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">1,115,073</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,851,537</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Intangible assets from Grupo San</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: Arial, Helvetica, Sans-Serif">302,980</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">288,682</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">78,400</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6,763</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; 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="border-top: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 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: 13.85pt; padding-left: 60pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total deferred liabilities</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,496,453</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,754,809</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 35.45pt">&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: -3.7pt; 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: 60pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Deferred tax liabilities, net</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,395,090</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,156,077</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif; color: #1A171B">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">At December 31, 2014,
the deferred tax asset from loss-carry forwards includes $&nbsp;371,774, which relate to federal, state and local tax losses of
Republic.</FONT></TD></TR></TABLE>

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


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>16.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Stockholders&rsquo; equity</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Common stock as of December 31, 2015 and
2014, is as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Number of shares</B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-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: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Amount</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.95pt; padding-left: 56.7pt">&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="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">90,850</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: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">441,786</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Variable capital</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">406,859</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; border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,978,444</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; font-size: 11pt">&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: Arial, Helvetica, Sans-Serif">497,709</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: Arial, Helvetica, Sans-Serif">2,420,230</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Effect of restatement</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; 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-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">412,038</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Total</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">497,709</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,832,268</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">All shares belong to Series &ldquo;B&rdquo;. This series is divided
in &ldquo;Class I&rdquo; with 90,850,050 shares that represent the fixed capital, and &ldquo;Class II&rdquo; with 406,859,164 corresponding
to variable capital stock. All shares have the same rights.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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, 2015 and 2014, the legal reserve of the Company amounted to $&nbsp;484,046 (nominal pesos), representing
20% of nominal capital.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Simec has a reserve
by $ 1,000,000 for the repurchase and placement of own shares, in order to increase the liquidity of the shares of the Company
and promote stability and continuity in their prices through the Mexican Stock Exchange. As of December 31 2015 and 2014, the Company
held 11,466,445 and 5,219,794 shares in treasury, respectively, which amounted to $ 501,322 and $&nbsp;273,041, respectively. The
resulting loss in 2015 for the purchase and sale of treasury shares amounted to $ 76.257 (gain of $ 20,575 in 2014). </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 28.35pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">A reconciliation of
the number of shares outstanding shows below:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Thousands of shares</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%; padding-right: 3.95pt; padding-left: 56.7pt">&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 STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Shares outstanding at beginning of 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: Arial, Helvetica, Sans-Serif">492,489</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: Arial, Helvetica, Sans-Serif">493,288</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Repurchase of own capital stocks, net</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(6,246)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(799)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 56.7pt; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Shares outstanding at year end</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">486,243</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">492,489</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>17.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Non-controlling interest</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As mentioned in Note 4, Grupo
Simec, S.A.B. de C.V. owns 100% of the capital stock of its subsidiaries, except for SimRep Corporation and subsidiaries (Republic),
in which it owns 50.22%. The non-controlling interest represents the equity in this USA subsidiary owned by minority shareholders,
and is presented in the consolidated statements of financial position after the controlling interest. The consolidated statements
of comprehensive income (loss) also show the controlling and non-controlling interests in total net income or loss for the years
as well as for the net comprehensive income or loss for the years. Controlling and non-controlling interest portions are presented
after the consolidated net income or loss. Below shows the changes in the non-controlling equity interest for the years ended December
31, 2015 and 2014:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&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="padding-right: 13.85pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%; padding-right: 3.95pt; padding-left: 35.45pt; text-align: justify">&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: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance at beginning of year</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">740,805</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,328,277</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Share on net loss 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: Arial, Helvetica, Sans-Serif">(2,046,621)</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: Arial, Helvetica, Sans-Serif">(685,605)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 40pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(146,038)</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: Arial, Helvetica, Sans-Serif">98,133</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 35.45pt; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Balance at end of year</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(1,451,854)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">740,805</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>18.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Transactions and balances with related
parties</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Transactions with related
parties, carried out in the ordinary course of business, were as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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="padding-right: 13.85pt; padding-left: 56.9pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 4pt; padding-left: 56.9pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 56.9pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -1.15pt; padding-left: 3.95pt">&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: 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 NOWRAP STYLE="padding-right: 3.95pt; padding-left: 70pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Interest expense</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,983</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,662</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,559</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.95pt; padding-left: 56.9pt; text-align: left">&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: -1.15pt; 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: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 56.9pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Management 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: -1.15pt; 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: -1.15pt; 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 NOWRAP STYLE="padding-right: 3.95pt; padding-left: 70pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">22,084</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">20,679</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">15,644</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.95pt; padding-left: 56.9pt; text-align: left">&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: -1.15pt; 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: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 3.95pt; padding-left: 56.9pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -1.15pt; 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: -1.15pt; 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 NOWRAP STYLE="padding-right: 3.95pt; padding-left: 70pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">7,479</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4,386</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">82,617</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.95pt; padding-left: 70pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Royalty expense</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: Arial, Helvetica, Sans-Serif">182,611</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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: -1.15pt; 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 NOWRAP STYLE="padding-right: 3.95pt; padding-left: 70pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">41,370</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">18,270</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">29,960</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.95pt; padding-left: 70pt; text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Direct short-term benefits</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: Arial, Helvetica, Sans-Serif">58,669</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">30,292</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">35,265</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="width: 54%; padding-left: 56.9pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Balances due from related
parties and due to related parties are as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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="padding-right: 3.55pt; padding-left: 56.9pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.9pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 82%; padding-right: 3.55pt; padding-left: 56.9pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: 5%; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="width: -1mm !important; 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: 10%; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 17.7pt; padding-left: 56.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">475,395</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">111,008</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Compa&ntilde;ia 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: Arial, Helvetica, Sans-Serif">432</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: Arial, Helvetica, Sans-Serif">411</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">449</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Compa&ntilde;ia 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: Arial, Helvetica, Sans-Serif">5,296</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">899</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: Arial, Helvetica, Sans-Serif">1,631</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">1,416</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: Arial, Helvetica, Sans-Serif">7,899</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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">&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: Arial, Helvetica, Sans-Serif">42,740</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Others</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">16,064</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: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">10,738</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 17.7pt; padding-left: 56.9pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">499,951</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">174,427</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 17.7pt; padding-left: 56.9pt">&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></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 17.7pt; padding-left: 56.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">219,777</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">186,308</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Tuberias Procarsa, S.A. de C.V.</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">520,107</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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">441,446</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Procarsa Tube and Pipe</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">52,152</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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">44,209</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">89,241</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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">75,581</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,851</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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,847</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -2.85pt; 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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,238</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">59</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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,285</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 70pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Others</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,741</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: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,877</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 17.7pt; text-align: justify; padding-left: 56.9pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">886,928</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -2.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">754,791</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.7pt 0 56.9pt; text-align: justify">At December 31, 2015 and 2014,
Industrias CH, S.A.B. accounts receivable correspond to balances of recoverable ISR from some subsidiaries that until 2013 was
consolidated for tax purposes. The others receivables and payable balances are generated by the purchase and sale of finished goods
as part of the Company&rsquo;s normal operations.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">As of December 31, 2015 and 2014,
the amounts payable to Industrias CH, S.A.B. de C.V., Tuberias Procarsa, S.A. de C.V., Procarsa Tube and Pipe and Pytsa Industrial
de Mexico, S.A. de C.V. come from loans (USD$&nbsp;50 million) and are denominated in US dollars at indefinite term and bear annual
interest rate of 0.25%. Similarly, the payable in 2015 and 2014 includes a loan without interest amounting to $&nbsp;32,462.</P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>19.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Cost and expenses by nature</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">At the years ended at December
31, 2015, 2014 and 2013, the cost of sales and administration expenses are as follows:</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: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 4pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Raw materials and consumables used</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">13,295,584</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">11,120,434</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">9,644,669</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2,298,739</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: Arial, Helvetica, Sans-Serif">1,856,625</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">1,635,504</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">783,824</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: Arial, Helvetica, Sans-Serif">1,866,900</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">1,514,718</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">252,746</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: Arial, Helvetica, Sans-Serif">555,987</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">438,918</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">123,263</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: Arial, Helvetica, Sans-Serif">316,574</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">262,348</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">214,517</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: Arial, Helvetica, Sans-Serif">349,790</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">367,313</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">839,802</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: Arial, Helvetica, Sans-Serif">586,966</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">442,454</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">2,847,491</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: Arial, Helvetica, Sans-Serif">3,542,852</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">3,502,042</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">588,769</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: Arial, Helvetica, Sans-Serif">407,604</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">402,761</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">1,261,093</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: Arial, Helvetica, Sans-Serif">1,100,534</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">1,052,900</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">1,035,586</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: Arial, Helvetica, Sans-Serif">1,851,520</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">1,750,898</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">1,138,042</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,130,230</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" 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: Arial, Helvetica, Sans-Serif">2,512,401</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">24,679,456</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">26,686,016</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">23,526,926</FONT></TD></TR>
<TR>
    <TD STYLE="width: 51%; padding-left: 35.45pt">&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: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 4pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: -4pt; padding-left: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -4pt; padding-left: 4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Cost of sales </FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">23,096,967</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">25,492,298</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">22,410,267</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,582,489</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,193,718</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1,116,659</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">24,679,456</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">26,686,016</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.5pt double; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">23,526,926</FONT></TD></TR>
<TR>
    <TD STYLE="width: 51%; padding-left: 35.45pt">&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: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>20.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Other (income) expenses, net</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">The integration of other income
(expenses) net, in the years ended December 31, 2015, 2014 and 2013, is as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.95pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; 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: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Restoration expenses</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5,594</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2,475</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"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">62,079</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Allowance for doubtful accounts</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: Arial, Helvetica, Sans-Serif">17,841</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">&nbsp;</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">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Land treatments in Pacific Steel, Inc.</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: Arial, Helvetica, Sans-Serif">5,251</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: Arial, Helvetica, Sans-Serif">710</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: Arial, Helvetica, Sans-Serif">8,140</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other expenses</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">28,686</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3,185</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">70,219</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; 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: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; 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: 3.95pt; 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: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Sale of scrap</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: Arial, Helvetica, Sans-Serif">(4,350)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(28,722)</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">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Penalty to client&nbsp;&nbsp;by cancel its supply contract</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: Arial, Helvetica, Sans-Serif">(174,354)</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: -3.7pt; 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: 3.95pt; 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: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Update obtained in tax returns </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: Arial, Helvetica, Sans-Serif">(406)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(4,262)</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: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(967)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other income</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(23,003)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(30,755)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(10,091)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other income</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(202,113)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(63,739)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(11,058)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Other (income) expenses, net</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(173,427)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.7pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">(60,554)</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">59,161</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>21.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Financial instruments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Capital risk
management</I></B> <B><I>&ndash;</I></B> 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 2013. The Company&rsquo;s policy is to not obtain bank loans or any other financing instrument.
</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Market risk</I></B>
<I>&ndash; </I>The Company&rsquo;s activities expose it primarily to the financial risks of changes in foreign currency exchange
rates and natural gas. The Company sometimes 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>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Foreign
                                                                                                                                 currency risk management </I></B><I>&ndash;<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 (includes foreign subsidiaries):</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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="padding-right: 17.7pt; padding-left: 56.7pt; font-size: 9.5pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Currency: Mexican peso</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 57%; padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 6%; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 6%; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 3.55pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Short &ndash; term assets</FONT></TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">7,749,794</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; font-size: 9.5pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">10,630,395</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Short &ndash; term liabilities</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,034,062</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; font-size: 9.5pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,471,028</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; font-size: 9.5pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 70pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Net monetary asset position in foreign currency</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">3,715,732</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">6,159,367</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 56.7pt; font-size: 9.5pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 3.55pt; padding-left: 70pt; font-size: 9.5pt; text-align: justify"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Equivalent in U.S. Dollars (thousands)</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">USD$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">214,289</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -3.55pt; padding-left: 3.55pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">USD$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.55pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">418,015</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Credit risk
management </I></B><I>&ndash;<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 Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify"></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.7pt 0 56.9pt; 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 Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 lines of credit bank (to
be used as letter of credits) 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.:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 0; 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: 56.7pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>(In thousands of US dollar, </B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>unaudited balances)</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 56.7pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 17.7pt; padding-left: 56.7pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -3.55pt; padding-left: 3.55pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 56%; padding-right: 17.7pt; padding-left: 56.7pt">&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">&nbsp;</TD>
    <TD STYLE="width: 10%; 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: 56.7pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 60pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Amount drawn</FONT></TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">357,000</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 24.35pt; text-align: justify; text-indent: -24.35pt">&nbsp;</TD>
    <TD STYLE="padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 0.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">190,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 60pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Undrawn balances</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">217,908</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: Black 1pt solid; padding-right: 3.55pt; padding-left: 3.55pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 0.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">162,129</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.55pt; padding-left: 56.7pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">139,092</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.55pt; text-align: right; text-indent: -28.35pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.55pt; padding-left: 3.55pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 0.85pt; padding-left: 3.55pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">27,871</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify"><B>&nbsp;</B></P>



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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 12pt 35.45pt; text-align: justify">At December 31, 2015 and 2014
the amount drawn, $&nbsp;17,664 and $ 43,304, respectively, correspond to subsidiaries of Industrias CH, S.A.B. de C.V. holding
company.</P>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"></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: Arial, Helvetica, Sans-Serif"><B>22.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Non-cash transactions</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">During the years ended December
31, 2015, 2014 and 2013, all investing activities were paid in the same year and in every financing activity was used cash.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>23.</B></FONT></TD><TD STYLE="padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Segment information</B></FONT></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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. Seven are located in the USA (distributed in the states of
Ohio, Indiana, Tennessee and New York) and one in Canada (Ontario). The plant in Canada represents approximately 4% and 5% of the
segment&rsquo;s total sales in 2015 and 2014. Since the year ended December 31, 2015, partial operations began at the plant in
Brazil, and selective information is presented retrospectively with 2014. The 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 Arial, Helvetica, Sans-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: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP COLSPAN="14" STYLE="padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9.5pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Year ended December 31, 2015</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Mexico</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>USA</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Brazil</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Operations<BR>
between<BR>
segments</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 33%; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Net sales</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">14,978,728</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">9,467,604</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">29,489</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">24,475,821</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Cost of sales</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(11,247,661)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(11,828,885)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(20,421)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(23,096,967)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Impairment of property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(2,071,901)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(2,071,901)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Gross profit</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,731,067</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(4,433,182)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">9,068</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(693,047)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,100,622)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(457,435)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(24,432)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,582,489)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Other income (expenses), net</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">5,656</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">184,039</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(16,268)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">173,427</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Interest income </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">33,872</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">155</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">34,027</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Interest expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(9,987)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(47,032)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(24,805)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">41,629</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(40,195)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Foreign exchange gain (loss), net</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">840,156</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(496,906)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(725,312)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(382,062)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Income (loss) before income taxes</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,500,142</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(4,753,455)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(553,343)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(683,683)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(2,490,339)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Income taxes</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,412,695)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">642,123</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(770,572)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Net income (loss) for the year</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,087,447</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(4,111,332)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(553,343)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(683,683)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -4.8pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(3,260,911)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Other information:</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">747,436</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">512,393</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,264</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,261,093</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Impairment of property, plant and equipment</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,071,901</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,071,901</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Total assets</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">28,530,321</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">7,891,964</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,226,150</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(7,404,019)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">32,244,416</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Total liabilities</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,889,025</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">10,808,505</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,829,524</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(7,404,019)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">7,123,035</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -1.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Acquisitions of property, plant and equipment </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">574,211</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify; text-indent: 6.3pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">396</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">73,136</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">647,743</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&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="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP COLSPAN="14" STYLE="padding-right: -6.3pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Year ended December 31, 2014</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Mexico</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>USA</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Brazil</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Operations<BR>
between<BR>
segments</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 33%; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Net sales</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 10%; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">14,518,299</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right; width: 10%"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">12,310,462</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right; width: 9%"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">26,828,761</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Cost of sales</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(12,075,965)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(13,416,333)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(25,492,298)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Gross profit</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,442,334</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,105,871)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,336,463</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(807,486)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(335,127)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(51,105)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,193,718)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Other income (expenses), net</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">29,622</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">30,932</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">60,554</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Interest income </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">24,773</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">366</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">25,139</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Interest expense</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(7,043)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(25,028)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(15,417)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">24,874</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(22,614)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Foreign exchange loss, net</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">397,598</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(109,371)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">185,865</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">474,092</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Income (loss) before<BR>
income taxes</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,079,798</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,434,728)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(175,893)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">210,739</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">679,916</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Income taxes</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(222,491)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">60,494</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(161,997)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: -3.7pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Net income (loss) for the year</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,857,309</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(1,374,234)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(175,893)</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">210,739</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">517,919</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Other information:</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">757,873</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">358,872</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,161</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,117,906</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Total assets</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">27,340,625</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">11,078,721</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,331,720</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(5,058,973)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">36,692,093</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Total liabilities</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,476,065</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">9,585,026</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">909,330</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(5,058,973)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">8,911,448</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Acquisitions of property, plant<BR>
and equipment </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">198,811</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify; text-indent: 6.3pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">924,241</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">735,306</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,858,358</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP COLSPAN="11" STYLE="padding-right: -6.3pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Year ended December 31, 2013</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Mexico</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>USA</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Operations between segments</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: -6.3pt; padding-left: 5.4pt; font-size: 9pt; text-align: center"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 34%; padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Net sales</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">13,792,466</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">10,576,474</FONT></TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">24,368,940</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Cost of sales</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(11,055,918)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(11,354,349)</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(22,410,267)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&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: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Gross profit</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,736,548</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(777,875)</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,958,673</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Administrative expenses</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">733,449</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">383,210</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,116,659</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Other income, net</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">47,854</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">11,307</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">59,161</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Interest income </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(16,903)</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(3,495)</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(20,398)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Interest expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">8,214</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">25,479</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(4,979)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">28,714</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Foreign exchange loss, net</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">66,506</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 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: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">66,506</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-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: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Income (loss) before income taxes</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,897,428</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,194,376</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">4,979</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">708,031</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&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: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Income taxes</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(159,570)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(121,998)</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(281,568)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 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: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Net income (loss) for the year</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">2,056,998</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,072,378</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">4,979</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 2.25pt double; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">989,599</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif"><B>Other information:</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">796,705</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">256,195</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,052,900</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Total assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">27,005,653</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">9,164,691</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(2,890,497)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">33,279,847</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Total liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,382,983</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">6,512,396</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">(2,890,497)</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">7,004,882</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: -2.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: -5.4pt; padding-left: 7; font-size: 9pt; text-indent: -7"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">Acquisitions of property, plant<BR>
and equipment (1)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,911,956</FONT></TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify; text-indent: 6.3pt">&nbsp;</TD>
    <TD STYLE="padding-right: -5.65pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">1,265,994</FONT></TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: -2.6pt; padding-left: 5.4pt; font-size: 9pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 5.4pt; font-size: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3pt; padding-left: 5.4pt; font-size: 9pt; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif">3,177,950</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">This amount in Mexico
include acquisitions made in Brazil facility amounting to $&nbsp;1,603.6 million in the year ended December 31, 2013.</FONT></TD></TR></TABLE>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Information about products:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="8" STYLE="border-bottom: Black 1pt solid; font: 11pt Book Antiqua, Times, Serif; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Year ended December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -5.75pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.95pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; 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: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Light structural</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,270,459</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">1,348,564</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: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">1,069,051</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Structural </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 Arial, Helvetica, Sans-Serif">1,957,388</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 Arial, Helvetica, Sans-Serif">1,720,764</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 Arial, Helvetica, Sans-Serif">1,531,259</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Bars</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 Arial, Helvetica, Sans-Serif">1,272,580</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 Arial, Helvetica, Sans-Serif">1,435,075</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 Arial, Helvetica, Sans-Serif">1,497,022</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Rebar</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 Arial, Helvetica, Sans-Serif">5,235,167</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 Arial, Helvetica, Sans-Serif">4,907,453</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 Arial, Helvetica, Sans-Serif">5,062,481</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Flat rebar</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 Arial, Helvetica, Sans-Serif">906,243</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 Arial, Helvetica, Sans-Serif">746,161</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 Arial, Helvetica, Sans-Serif">548,631</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Hot rolled bars</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 Arial, Helvetica, Sans-Serif">8,568,417</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 Arial, Helvetica, Sans-Serif">10,310,093</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 Arial, Helvetica, Sans-Serif">9,373,022</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Cold drawn bars</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 Arial, Helvetica, Sans-Serif">2,750,380</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 Arial, Helvetica, Sans-Serif">3,646,684</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 Arial, Helvetica, Sans-Serif">3,408,692</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Others</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 Arial, Helvetica, Sans-Serif">2,515,187</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,713,967</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 Arial, Helvetica, Sans-Serif">1,878,782</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 6pt; padding-right: 3.95pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,475,821</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">26,828,761</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,368,940</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 14.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">Information about geographical
areas:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="8" STYLE="border-bottom: Black 1pt solid; font: 11pt Book Antiqua, Times, Serif; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif"><B>Year ended December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 13.85pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 5</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -5.75pt; padding-left: 3.95pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>2 0 1 4</B></FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: -4.55pt; padding-left: 3.95pt; text-align: center; font-family: Book Antiqua, Times, Serif"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>2 0 1 3</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; padding-right: 3.95pt; padding-left: 35.45pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: -3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 5.65pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 13%; padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; 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: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">Mexico</FONT></TD>
    <TD STYLE="padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">14,543,446</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">14,165,166</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">13,633,192</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">9,417,392</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">11,941,251</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">10,051,087</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">371,610</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">493,911</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">535,164</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">134,031</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">216,293</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">136,130</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; font-size: 9.5pt"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-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 Arial, Helvetica, Sans-Serif">9,342</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: -1.15pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">12,140</FONT></TD>
    <TD STYLE="padding-right: 13.85pt; padding-left: 3.95pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: -1.15pt; 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 Arial, Helvetica, Sans-Serif">13,367</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 3.95pt; padding-left: 35.45pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,475,821</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">26,828,761</FONT></TD>
    <TD STYLE="padding-right: 3.95pt; padding-left: 3.95pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: -1.15pt; padding-left: 3.95pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; padding-right: 3.95pt; padding-left: 3.95pt; font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,368,940</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>24.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Contingencies</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 35.45pt; text-align: justify">As of December 31, 2015 and 2014,
the Company has the following contingencies:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Pacific Steel, Inc.
(PS), a subsidiary located in National City in San Diego County, California, United States of America and its main activity is
the purchase and sale of scrap, has the following environmental contingencies:</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"><B>California Regional Water Control
Board, CRWCB</B></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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,
2015, the CRWCB had not notified PS the results of its inspection.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"><B>Department of Toxic Substances
Control</B></P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 Control Laws into 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 </P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in"> Injunctive Relief in San Diego Superior Court. On July 26, 2004,
the court issued a judgment, whereby PS was obligated to pay USD$&nbsp;0.2 million, which have already been paid.</P>


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

<P STYLE="font: 10pt Arial, Helvetica, Sans-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 PS as a result of such infractions. As of December 31, 2014 PS is waiting a final decision
from DTSC.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">The land remediation
was suspended at the beginning of 2011 due to the inefficiency of the process, which was verified with several studies. As an alternative,
once the necessary permits were obtained from the authorities in Mexico, in November 2011, the Mexicali plant began the process
of importing raw land for final disposal in a secure landfill based in Nuevo Leon State. This landfill is after the separation
of the metal content, which is used as raw material in the smelting process.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">The daily load
of 5 trucks of land in PS is performed in the presence of DTSC staff.&nbsp;At December 31, 2014, PS had already shipped 27,800
tons of material to the Mexicali plant.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The disposition of a stack which
is estimated at 8,000 tons of material classified RCRA (hazardous for Federal purposes) is still pending. The company is in process
of obtaining the appropriate permissions to Mexican authorities for this type of material. The process began in early 2013, but
the response of the authorities has been slow, however, are not expected to take more than 600 days from the date of emission of
these financial statements 2015 to grant permissions.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Therefore, on April 9, 2015, a
letter from the Attorney General Department of Justice State of California is required to PS, in the absence of obtaining permission
from the Mexican authorities, presented a program for transport the pile of contaminated soil classified as an authorized RCRA
confinement in the United States at the latest on April 22, 2015. This program establishment should include the completion of the
shipment of the stack later than July 9, 2015 and warns that if the company does not comply with this, the DTSC will immediately
proceed with a civil lawsuit seeking the maximum amount of fines established by law and corresponding legal redress.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On April 21, 2015, a letter was
sent to the Attorney General challenging the positions in their letter. The authorities in Mexico have not denied permission to
the Company but have simply requested that it present its application in a different format. The revised application was submitted
and received by the authority on April 17, 2015. It is expected to be approved in a maximum of 60 days, so an extension was requested
for the commencement of loading committing to not get permits in Mexico during the time it proceeds to confinement in the United
States of America.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">The Company, based on the experience
of the board in recent years, believes that the cost of sending the remaining stack would result in a total of USD $ 0.3 million
and $ 0.5 million. As of December 31, 2014, the Company has created a reserve for USD $ 0.4 million under the heading of other
accounts payable in the consolidated statement of financial position.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">On July 23, 2015, the Attorney
General denied the extension requested by PS and demand the immediate start of shipments of the land RCRA and an authorized confinement
was received; in the event that Pacific Steel shipments will not start before July 30, 2015, DTSC initiated the lawsuit against
the Company; however, given the delay in their response, it was agreed to extend the 10 weeks estimated for the process of the
start date.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify">Therefore, PS began transporting
classified material RCRA on July, 29, 2015 to complete shipments on September, 12 of 2015 with a total of 3,000 metric tons.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">The Company,
based on the experience of past years shipments, believes the cost of shipping the remaining piles would result in a total of between
USD$&nbsp;0.3 million and USD$&nbsp;0.5 million. At </P>

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


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">December 31, 2015 the company has created a reserve for USD$&nbsp;0.4 million
under the heading of accrued expenses payable in the consolidated statement of financial position.</P>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify; text-indent: 0in">On January 5,
2016, it was filed with the Superior Court of San Diego's &quot;final judgment and order on consent&quot; or Consent Judgment negotiated
between the Attorney General of California, Department of Toxic Substances Control (DTSC) and Company, which is determined as follows:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Payment of USD$&nbsp;138,000
as civil penalties as a result of a series of violations of violations at Hazardous Waste Control Laws into the State of California
Security Code between 2010 and 2015. The company denies having committed these violations. To date it has paid USD$&nbsp;84,000
and the balance is paid according to the terms established in the Judgment.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Remove the stack
of land classified as hazardous material or RCRA and sent it to an approved landfill. The Judgment indicates that the Company complied
with this commitment the October 2, 2015.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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">-</TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">After removing the
stack of land, the Company must take samples of the soil in the area where the stack of land was located. Samples were taken and
the results indicate that the soil had pollution levels, although are not equal to those of the RCRA stack, they exceed the limits
set by the State. On April 7, 2016, the Attorney for the State and DTSC, demanded that the Company remove soil 10 feet across and
2 feet deep on the perimeter of the area where the stack of land was RCRA and disposed of in an approved landfill. So far the amount
of land and the cost involved is unknown.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 0.5in">&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: Arial, Helvetica, Sans-Serif">The Company shall
continue to meet the conditions of the final judgment, the agreement corrective measures and all tasks arising from this and are
entered in the same court in 2004. At this time what resulted from these reports is unknown, corrective measures will be suggested
and/or cost.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">As with most steel
producers in United States of America, Republic could incur significant costs related to environmental issues in the future, including
those arising from environmental compliance activities and remediation stemming from historical waste management practices at the
Republic&rsquo;s facilities. The undiscounted reserve to cover probable environmental liabilities of USD$&nbsp;2.9 million and
USD$ 2.8 million were recorded as of December&nbsp;31, 2015 and 2014, respectively. The reserve includes incremental direct costs
of remediation efforts and post-remediation monitoring costs that are expected to be paid after corrective actions are complete.
As of December 31, 2015, the current and non-current portions amounted to USD$ 1.2 million and USD$&nbsp;1.7 million, (USD$ 1.0
million and USD$ 1.8 million in 2014), respectively, they are included in accounts payable and accrued liabilities in the short
and long term, respectively, in the Consolidated Statements of Financial Position.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On the other hand,
the Company is not aware of any material environmental remediation liabilities or contingent liabilities relating to environmental
matters with respect to 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 practice in installations of Republic and PS 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 future financial performance of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">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 has not recognized any liabilities for such lawsuits and claims.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Mexican 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. Such authorities are currently reviewing some subsidiaries and at the date of issuance of these
consolidated financial statements have not completed its reviews.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">United States of America
have the right to review, at least the previous three years and could determine differences in taxes payable, plus corresponding
adjustments, surcharges and fines.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 14.2pt; text-align: justify">&nbsp;</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">g.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Canadian tax authorities
have the right to review, at least the previous four years and could determine differences in taxes payable, plus corresponding
adjustments, surcharges and fines.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">h.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Brazilian tax authorities
have the right to review, at least the previous five years and could determine differences in taxes payable,
plus corresponding adjustments, surcharges and fines.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.9pt 0 56.7pt; text-align: justify"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif"><B>25.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Commitments</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">a.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Republic leases certain
equipment, office space and computer equipment under non-cancelable operating leases. The leases expire at various dates through
2019. During the years ended December 31, 2015, and 2014, rental expenses relating to operating leases amounted to USD$&nbsp;1.5
million, and USD$&nbsp;1.3 million, respectively. At December 31, 2015, total future minimum lease payments under non-cancelable
operating leases are USD$&nbsp;1.06 million, USD$&nbsp;0.87 million, USD$&nbsp;0.50 millions and USD$&nbsp;0.49 million in 2016,
2017, 2018 and 2019, respectively. Currently there are no additional obligations post-2019.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">b.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">In January of 2013,
the Company entered into a 15 year product supply agreement with Air Products and Chemicals, Inc. The agreement requires that Air
Products and Chemicals construct and install a plant for the production of oxygen, nitrogen and argon gas on the premises of the
Lorain, Ohio facility. The 15 year term of this agreement becomes effective at the time that the plant becomes operational. At
the time of these financial statements, the plant is not yet operational. Once operational, the agreement requires that the Company
pay a monthly base facility fee of USD$&nbsp;166,150 (adjusted annually for inflation) over the 15 year life of the agreement,
irrespective of product actually taken under the supply agreement. The Company also has the option of terminating this supply agreement
early with 12 months written notice and a payment of a termination fee. The termination payment is made in accordance with the
following termination schedule:</FONT></TD></TR></TABLE>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Contract </B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Years</B></P>
        <P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>remaining</B></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>US dollars<BR>
(thousands)</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; width: 33%">&nbsp;</TD>
    <TD STYLE="width: 38%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="text-align: right; width: 16%">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">15 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">USD$</FONT></TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">26,204</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">14 years </FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">24,529</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">13 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">22,853</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">12 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">21,178</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">11 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">19,503</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">10 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">17,828</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">9 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">16,152</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">8 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">14,477</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">7 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">12,802</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">6 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">11,127</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">5 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">9,541</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">4 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">7,776</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">3 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">6,101</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">2 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">4,426</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">0-1 years</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 9.5pt; text-align: right"><FONT STYLE="font: 9.5pt Arial, Helvetica, Sans-Serif">2,751</FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">c.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On August of 2012
the Company entered into a contract with the supplier Russula, S.A. for an amount of USD$&nbsp;5.4 million for the development of a
treatment plant wastewater for its subsidiary GV do Brasil Industria e Comercio de A&ccedil;o LTDA. At December 31, 2015 only 10%
remains outstanding, until delivery of final acceptance certificate of the plant and the warranty.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">d.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">On August of 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 de A&ccedil;o LTDA. At December
31, 2015 only 5% remains outstanding, until delivery of the proforma invoice and the final acceptance certificate. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-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: Arial, Helvetica, Sans-Serif">e.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">In January 2013,
the Company entered into an agreement with EnerNOC which enables Republic Steel to receive payments for reducing the electricity
consumption during a dispatch declared by PJM Interconnection as an emergency. The agreement is for 5 years, effective January
31, 2013 and expires on May 31, 2018. During the years ended December 31, 2015 and 2014, the Company recognized income from this
agreement of USD$&nbsp;3.2 million and USD$ 2.0 million, respectively.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 0.5in">&nbsp;</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: 35.45pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">f.</FONT></TD><TD STYLE="text-align: justify; padding-right: 13.85pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">As mentioned in Note
2-f is building a new plant of special steels, consequently, on October 20 began the contract &quot;turnkey&quot; signed with Danieli
</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&amp;</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">
Officine Meccaniche for the construction of the new plant (except civil engineering) and the supply of all equipment. The contract
value is approximately USD$ 203 million, of which at 31 December 2015 have been paid advances for USD$&nbsp;27.7 million and during 2016, and until the date of the
financial statements issue others USD$&nbsp;59.4 million. The project is estimated will conclude in December, 2017.</FONT></TD></TR></TABLE>



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

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<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>26.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Subsequent events</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">As described in Note 1, part
of the shares that comprise the share capital of the Company is listed on the Mexican Stock Exchange (BMV) and the New York Stock
Exchange (NYSE). As a result of a delay in the issuance with the BMV of the audited financial statements of the company as of December
31, 2015 and for the year then ended, it has suspended the listing of the company&rsquo;s shares in its exchange. Even though the
company has not timely submitted the audited financial statements nor filed the Form 20-F with the SEC and the NYSE, the NYSE has
not taken any action as of the date of this report. The company expects to file all the necessary reports with these Exchanges
in the very near term.</P>

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

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<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>27.</B></FONT></TD><TD STYLE="padding-right: 13.9pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Financial statements issuance authorization</B></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0 13.85pt 0 35.45pt; text-align: justify">On September 19, 2016, the
issuance of the accompanying consolidated financial statements was authorized by Ing. Luis Garcia Limon and C.P. Mario Moreno Cortez,
Chief Executive Officer and Coordinator of Finance, of Grupo Simec, S.A.B. de C.V.</P>

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<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>2
<FILENAME>e71215ex8-1.htm
<DESCRIPTION>LIST OF SUBSIDIARIES
<TEXT>
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<HEAD>
<TITLE></TITLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; 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">
        <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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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"><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-right: 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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Simec International 9, S.A.P.I. 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"><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"><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"><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"><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"><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"><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"><FONT STYLE="font: 10pt 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: 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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Sider&uacute;rgica del Occidente y 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">100.00%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Gs Steel BV</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Netherlands</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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">RRLC, S.A.P.I. 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">95.10%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Grupo Chant, S.A.P.I. 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">97.61%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Aceros Especiales Simec 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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Recursos Humanos de la Industria Sider&uacute;rgica 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>
</TABLE>
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<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>3
<FILENAME>e71215ex12-1.htm
<DESCRIPTION>CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
<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 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&#8217;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&#8217;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&#8217;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&#8217;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&#8217;s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the company&#8217;s auditors and the audit committee of the company&#8217;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&#8217;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&#8217;s internal
control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: September 21, 2016</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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"><I>/s/ Mario Moreno Cortez</I></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>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

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

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<DOCUMENT>
<TYPE>EX-12.2
<SEQUENCE>4
<FILENAME>e71215ex12-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER
<TEXT>
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<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 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, Luis Garcia
Lim&oacute;n, 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 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&#8217;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&#8217;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&#8217;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&#8217;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&#8217;s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the company&#8217;s auditors and the audit committee of the company&#8217;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&#8217;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&#8217;s internal
control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Dated: September 21, 2016</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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:</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt"><I>/s/ Luis Garcia Lim&oacute;n</I></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">Luis Garcia Lim&oacute;n</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>Chief Executive Officer</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

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

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<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>5
<FILENAME>e71215ex13-1.htm
<DESCRIPTION>CERTIFICATIONS OF CEO AND PRINCIPAL FINANCIAL OFFICER
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: right"><B>Exhibit 13.1</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 906 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;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 &#8220;Company&#8221;), does hereby certify, to such officer&#8217;s
knowledge, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Report
on Form 20-F for the year ended December 31, 2015 of the Company, as filed with the Securities and Exchange Commission on September
21, 2016, 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">Dated: September 21, 2016</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-size: 10pt">
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt"><I>/s/ Luis Garcia Lim&oacute;n</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <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">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">Luis Garcia Lim&oacute;n</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"><FONT STYLE="font-size: 10pt"><I>Chief Executive Officer</I></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></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"><FONT STYLE="font-size: 10pt"><I>/s/ Mario Moreno Cortez</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <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">&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"><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>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
