11. Financial Status and Performance

Financial Statements

Summary of the consolidated financial statements for the years ended
March 31, 2012, March 31, 2011, March 31, 2010 is presented below:

+------------------------------------+----------+----------+----------+
|                                    |          | (Unit:   |          |
|                                    |          | Baht     |          |
|                                    |          | million) |          |
+------------------------------------+----------+----------+----------+
| Transactions                       | 2012     | 2011     | 2010     |
+------------------------------------+----------+----------+----------+
| Balance Sheets                     |          |          |          |
+------------------------------------+----------+----------+----------+
| Cash and cash equivalents          | 470.72   | 810.99   | 2,092.74 |
+------------------------------------+----------+----------+----------+
| Trade accounts receivable - net    | 807.07   | 1,266.24 | 881.70   |
+------------------------------------+----------+----------+----------+
| Receiva                            | 92.89    | 93.87    | 71.65    |
| bles and loans – related companies |          |          |          |
+------------------------------------+----------+----------+----------+
| Inventories                        | 6,942.63 | 6,917.80 | 6,461.05 |
+------------------------------------+----------+----------+----------+
| Other current assets               | 171.70   | 217.00   | 738.64   |
+------------------------------------+----------+----------+----------+
| P                                  | 9,646.05 | 1        | 1        |
| roperty, plant and equipment – net |          | 0,538.15 | 1,616.93 |
+------------------------------------+----------+----------+----------+
| Other assets                       | 4,828.84 | 5,069.18 | 4,652.13 |
+------------------------------------+----------+----------+----------+
| Total assets                       | 2        | 2        | 2        |
|                                    | 2,959.90 | 4,913.23 | 6,514.84 |
+------------------------------------+----------+----------+----------+
|                                    | -        |          |          |
+------------------------------------+----------+----------+----------+
| Ban                                | 830.67   | -        | 2.28     |
| k overdrafts and short-term loans  |          |          |          |
+------------------------------------+----------+----------+----------+
| Trade accounts payable             | 2,436.74 | 2,824.94 | 2,783.96 |
+------------------------------------+----------+----------+----------+
| Curren                             | 1,207.50 | 1,300.00 | 875.92   |
| t portion of long-term liabilities |          |          |          |
+------------------------------------+----------+----------+----------+
| Paya                               | 7.25     | 19.90    | 13.87    |
| bles and loans – related companies |          |          |          |
+------------------------------------+----------+----------+----------+
| Other current liabilities          | 497.86   | 734.57   | 933.72   |
+------------------------------------+----------+----------+----------+
| Long-term loans                    | 4,325.00 | 4,325.00 | 5,227.69 |
+------------------------------------+----------+----------+----------+
| Other liabilities                  | 127.53   | 594.97   | 583.87   |
+------------------------------------+----------+----------+----------+
| Total liabilities                  | 9,432.54 | 9,799.38 | 1        |
|                                    |          |          | 0,421.31 |
+------------------------------------+----------+----------+----------+
|                                    |          |          |          |
+------------------------------------+----------+----------+----------+

+--------------------------------------+---------+---------+---------+
|                                      |         | (Unit:  |         |
|                                      |         | Baht    |         |
|                                      |         | m       |         |
|                                      |         | illion) |         |
+--------------------------------------+---------+---------+---------+
| Transactions                         | 2012    | 2011    | 2010    |
+--------------------------------------+---------+---------+---------+
| Balance Sheets (Cont.)               |         |         |         |
+--------------------------------------+---------+---------+---------+
| Registered share capital             | 11      | 11      | 11      |
|                                      | ,025.58 | ,025.58 | ,025.58 |
+--------------------------------------+---------+---------+---------+
| Paid-up capital                      |         |         |         |
+--------------------------------------+---------+---------+---------+
|  Preferred shares                    | 252.77  | 252.77  | 252.77  |
+--------------------------------------+---------+---------+---------+
|  Ordinary shares                     | 8       | 8       | 8       |
|                                      | ,168.77 | ,168.77 | ,168.77 |
+--------------------------------------+---------+---------+---------+
| Share premium                        | 3       | 3       | 3       |
|                                      | ,258.63 | ,258.63 | ,258.62 |
+--------------------------------------+---------+---------+---------+
| Warrants                             | 130.20  | 130.20  | 130.20  |
+--------------------------------------+---------+---------+---------+
| Convertible debentures               | -       | -       | -       |
+--------------------------------------+---------+---------+---------+
| Unrealized                           | 1.59    | 2.49    | 2.00    |
| gain from investment in subsidiaries |         |         |         |
+--------------------------------------+---------+---------+---------+
| Legal reserve                        | 327.22  | 286.94  | 285.18  |
+--------------------------------------+---------+---------+---------+
| Retained earnings (loss)             | 1       | 3       | 3       |
|                                      | ,389.64 | ,010.51 | ,988.28 |
+--------------------------------------+---------+---------+---------+
| Minority interest                    | (1.46)  | 3.54    | 7.71    |
+--------------------------------------+---------+---------+---------+
| Total shareholders’ equity           | 13      | 15      | 16      |
|                                      | ,527.36 | ,113.85 | ,093.53 |
+--------------------------------------+---------+---------+---------+
|                                      |         |         |         |
+--------------------------------------+---------+---------+---------+
| Statements of Income                 |         |         |         |
+--------------------------------------+---------+---------+---------+
| Revenue from sales of goods          | 26      | 26      | 22      |
|                                      | ,223.03 | ,761.72 | ,421.75 |
+--------------------------------------+---------+---------+---------+
| Total revenues                       | 26      | 26      | 22      |
|                                      | ,343.09 | ,819.64 | ,520.38 |
+--------------------------------------+---------+---------+---------+
| Cost of goods sold                   | 26      | 26      | 21      |
|                                      | ,629.04 | ,858.63 | ,714.74 |
+--------------------------------------+---------+---------+---------+
| Gross profit                         | (       | (96.91) | 707.01  |
|                                      | 406.00) |         |         |
+--------------------------------------+---------+---------+---------+
| Selling and administrative expenses  | 765.82  | 738.65  | 700.60  |
+--------------------------------------+---------+---------+---------+
| Interest expense                     | 297.98  | 282.88  | 148.58  |
+--------------------------------------+---------+---------+---------+
| Income tax                           | 235.84  | (80.33) | 12.75   |
+--------------------------------------+---------+---------+---------+
| Pr                                   | (1,     | (       | (56.29) |
| ofit (Loss) before minority interest | 585.59) | 980.18) |         |
+--------------------------------------+---------+---------+---------+
| Net profit (Loss)                    | (1,     | (       | (54.40) |
|                                      | 580.59) | 976.00) |         |
+--------------------------------------+---------+---------+---------+
| Earnings (Loss) per share – basic    | (0.19)  | (0.12)  | (0.01)  |
+--------------------------------------+---------+---------+---------+
|                                      |         |         |         |
+--------------------------------------+---------+---------+---------+

Tata Steel (Thailand) Public Company Limited

Statements of Cash Flows

For the years ended March 31, 2012, March 31, 2011 and March 31, 2010

+---+----------------------------------------+-------+---+------+---+--------+
|   |                                        | (     |   |      |   |        |
|   |                                        | Unit: |   |      |   |        |
|   |                                        | Baht  |   |      |   |        |
|   |                                        | mil   |   |      |   |        |
|   |                                        | lion) |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
| C |                                        | 2012  |   | 2011 |   | 2010   |
| a |                                        |       |   |      |   |        |
| s |                                        |       |   |      |   |        |
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+---+----------------------------------------+-------+---+------+---+--------+
| N |                                        | (1,34 |   | (1   |   | (      |
| e |                                        | 9.75) |   | ,060 |   | 43.54) |
| t |                                        |       |   | .51) |   |        |
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+---+----------------------------------------+-------+---+------+---+--------+
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| s |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Unrealized loss (gain) on foreign      | (2    |   | (36  |   | (5.74) |
|   | exchange                               | 0.09) |   | .29) |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Reversal of allowance for doubtful     | -     |   | (0   |   | 5.91   |
|   | accounts                               |       |   | .32) |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Reversal of allowance for inventory    | 18.52 |   | (5   |   | (3.18) |
|   | obsolescence                           |       |   | .04) |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Depreciation and amortization          | 1,0   |   | 1,13 |   | 925.07 |
|   |                                        | 71.01 |   | 2.51 |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Goodwill amortization                  | -     |   | -    |   | -      |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Provision for employee retirement      | 30.87 |   | 2    |   | 13.70  |
|   | benefit                                |       |   | 2.89 |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Loss from writing off fixed assets     | 0.03  |   | 0.08 |   | 0.47   |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Loss from impairment of fixed assets   | -     |   | -    |   | -      |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Interest income                        | (     |   | (8   |   | (      |
|   |                                        | 8.34) |   | .18) |   | 17.60) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Interest expense and financial charges | 2     |   | 28   |   | 148.58 |
|   |                                        | 97.98 |   | 2.88 |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Loss (Gain) from sale of property and  | (     |   | (1   |   | (0.13) |
|   | equipment                              | 0.09) |   | .41) |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Minority interest in loss of           | -     |   | -    |   | -      |
|   | subsidiaries                           |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Income tax expense                     | -     |   | -    |   | -      |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Trade accounts receivable and          | 4     |   | (294 |   | (3     |
|   | receivables from related companies     | 68.35 |   | .44) |   | 79.03) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Inventories-net                        | (29   |   | (488 |   | (1,4   |
|   |                                        | 8.16) |   | .09) |   | 11.25) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Other current assets, value added tax  | 87.53 |   | 24   |   | (3     |
|   | and other non-current assets           |       |   | 2.30 |   | 25.67) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Trade accounts payable and payables to | (40   |   | 5    |   | 1,     |
|   | related companies                      | 4.95) |   | 0.86 |   | 121.18 |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Accrued expenses and other current     | (14   |   | (25  |   | 179.86 |
|   | liabilities                            | 2.36) |   | .44) |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Provision for employee retirement      | (4    |   | (11  |   | (      |
|   | benefit                                | 0.80) |   | .73) |   | 11.99) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Income tax paid                        | (11   |   | (194 |   | (1     |
|   |                                        | 0.62) |   | .85) |   | 99.06) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Interest paid                          | (29   |   | (282 |   | (1     |
|   |                                        | 7.97) |   | .88) |   | 48.64) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Net cash provided by operating         | (48   |   | (677 |   | (1     |
|   | activities                             | 1.00) |   | .65) |   | 51.07) |
+---+----------------------------------------+-------+---+------+---+--------+
| C |                                        |       |   |      |   |        |
| a |                                        |       |   |      |   |        |
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| t |                                        |       |   |      |   |        |
| i |                                        |       |   |      |   |        |
| v |                                        |       |   |      |   |        |
| i |                                        |       |   |      |   |        |
| t |                                        |       |   |      |   |        |
| i |                                        |       |   |      |   |        |
| e |                                        |       |   |      |   |        |
| s |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Interest received                      | 11.25 |   | 6.63 |   | 17.60  |
+---+----------------------------------------+-------+---+------+---+--------+
|   | ส่วนของผู้ถือหุ้นส่วนน้อย                      |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Purchase of property, plant and        | 0.59  |   | 1.91 |   | 0.23   |
|   | equipment                              |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | ค่าความนิยม                              |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | สินทรัพย์รอการขาย                         |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Sale of property and equipment         | (15   |   | (131 |   | (1,0   |
|   |                                        | 1.78) |   | .75) |   | 38.08) |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Net cash provided by (used in)         | (13   |   | (123 |   | (1,0   |
|   | investing activities                   | 9.94) |   | .21) |   | 20.25) |
+---+----------------------------------------+-------+---+------+---+--------+
|   |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
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+---+----------------------------------------+-------+---+------+---+--------+
|   |                                        | (     |   |      |   |        |
|   |                                        | Unit: |   |      |   |        |
|   |                                        | Baht  |   |      |   |        |
|   |                                        | mil   |   |      |   |        |
|   |                                        | lion) |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
| C |                                        | 2012  | 2 |      | 2 |        |
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| s |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Interest paid and financial charges    | -     | - |      | - |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Cash paid for financial lease          | -     | - |      | ( |        |
|   |                                        |       |   |      | 1 |        |
|   |                                        |       |   |      | 5 |        |
|   |                                        |       |   |      | . |        |
|   |                                        |       |   |      | 0 |        |
|   |                                        |       |   |      | 2 |        |
|   |                                        |       |   |      | ) |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Increase in bank overdrafts and        | 8     | ( |      | 0 |        |
|   | short-term loans from financial        | 30.67 | 2 |      | . |        |
|   | institutions                           |       | . |      | 3 |        |
|   |                                        |       | 2 |      | 6 |        |
|   |                                        |       | 8 |      |   |        |
|   |                                        |       | ) |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Repayment of long-term loans           | (55   | ( |      | ( |        |
|   |                                        | 0.00) | 9 |      | 6 |        |
|   |                                        |       | 0 |      | 2 |        |
|   |                                        |       | 0 |      | 5 |        |
|   |                                        |       | . |      | . |        |
|   |                                        |       | 0 |      | 0 |        |
|   |                                        |       | 0 |      | 0 |        |
|   |                                        |       | ) |      | ) |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Payment of long-term debt to related   | -     | - |      | - |        |
|   | company                                |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Trade accounts payable arising from    | -     | - |      | - |        |
|   | debt restructuring                     |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | เงินกู้ยืมระยะยาวจากการปรับโครงสร้างหนี้       |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Proceeds from long-term loans          | -     | 4 |      | 7 |        |
|   |                                        |       | 2 |      | 5 |        |
|   |                                        |       | 1 |      | 1 |        |
|   |                                        |       | . |      | . |        |
|   |                                        |       | 3 |      | 8 |        |
|   |                                        |       | 9 |      | 1 |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Payment of dividend                    | -     | - |      | - |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Capital increase                       | -     | - |      | - |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   | Net cash provided by (used in)         | 2     | ( |      | 1 |        |
|   | financing activities                   | 80.67 | 4 |      | 1 |        |
|   |                                        |       | 8 |      | 2 |        |
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+---+----------------------------------------+-------+---+------+---+--------+
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+---+----------------------------------------+-------+---+------+---+--------+
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+---+----------------------------------------+-------+---+------+---+--------+
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| r |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+
|   |                                        |       |   |      |   |        |
+---+----------------------------------------+-------+---+------+---+--------+

Financial Ratios

+-------------------------------------------+--------+--------+--------+
| Financial Ratios                          | 2012   | 2011   | 2010   |
+-------------------------------------------+--------+--------+--------+
| Liquidity ratio                           |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Current ratio (times)                    | 1.70   | 1.91   | 2.21   |
+-------------------------------------------+--------+--------+--------+
|  Quick acid ratio (times)                 | 0.26   | 0.43   | 0.65   |
+-------------------------------------------+--------+--------+--------+
| Capacity of assets utilization ratio      |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Accounts receivable turnover (times)     | 25.30  | 24.92  | 35.12  |
+-------------------------------------------+--------+--------+--------+
|  Accounts receivable collection (days)    | 14     | 14     | 11     |
+-------------------------------------------+--------+--------+--------+
|  Inventory turnover (times)               | 18.26  | 26.09  | 24.52  |
+-------------------------------------------+--------+--------+--------+
|  Fixed asset turnover (times)             | 2.61   | 2.42   | 1.96   |
+-------------------------------------------+--------+--------+--------+
|  Total asset turnover (times)             | 1.10   | 1.04   | 0.87   |
+-------------------------------------------+--------+--------+--------+
| Coverage ratio                            |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Debt ratio (%)                           | 41     | 39     | 39     |
+-------------------------------------------+--------+--------+--------+
|  Interest Coverage ratio (times)          | 0.87   | 1.11   | 6.81   |
+-------------------------------------------+--------+--------+--------+
|  Debt to Equity ratio (times)             | 0.70   | 0.65   | 0.65   |
+-------------------------------------------+--------+--------+--------+
| Efficiency ratio                          |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Net profit margin (%)                    | (6.0)  | (3.6)  | (0.2)  |
+-------------------------------------------+--------+--------+--------+
|  Return on total assets (%)               | (6.6)  | (3.8)  | (0.2)  |
+-------------------------------------------+--------+--------+--------+
|  Return on equity (%)                     | (11.0) | (6.3)  | (0.4)  |
+-------------------------------------------+--------+--------+--------+
|  Gross Profit margin (%)                  | (1.5)  | (0.4)  | 3      |
+-------------------------------------------+--------+--------+--------+
|  Operating profit margin (%)              | (3.9)  | (2.9)  | 0.5    |
+-------------------------------------------+--------+--------+--------+
|                                           |        |        |        |
+-------------------------------------------+--------+--------+--------+

Management Discussion & Analysis

Financial Performance

Revenues

April 2011 - March 2012

Revenue from sales of the Company and its subsidiaries was Baht
26,223.03 million, 48%, 40% and 5% of which were generated domestically
through of the rebars, wire rods, small section and other, respectively.
The other 7% was generated through international sales.

Other income of the Company and its subsidiaries amounted to Baht 120.05
million, representing 0.45 % of total revenues. It comprised mainly of
gain on store sales of Baht 39 million, penalty of Liquidated damages
for non-fulfilment of the performance guarantee (MBF Project) Baht 35.00
million, exchange rate of Baht 23.73 million, interest income of Baht
8.34 million and other income of Baht 13.98 million.

April 2010 - March 2011

Revenue from sales of the Company and its subsidiaries was Baht
26,761.72 million, 46%, 39% and 3% of which were generated domestically
through of the rebars, wire rods, small section and other, respectively.
The other 12% was generated through international sales.

Other income of the Company and its subsidiaries amounted to Baht 57.92
million, representing 0.22 % of total revenues. It comprised mainly of
gain from store sales of Baht 23.37 million, dividend income of Baht
18.21 million, interest income of Baht 8.17 million, delay penalty
income of Baht 2.67 million, previous year income of Baht 2.30 million
and other income of Baht 3.20 million.

April 2009 - March 2010

Revenue from sales of the Company and its subsidiaries was Baht
22,421.75 million, 51%, 34% and 3% of which were generated domestically
through of the rebars, wire rods, small section and other, respectively.
The other 11% was generated through international sales.

Other income of the Company and its subsidiaries amounted to Baht 98.64
million, representing 0.44 % of total revenues. It comprised mainly of
gain on exchange rate of Baht 39.96 million, interest income of Baht
17.60 million, gain from store sales of Baht 2.40 million, delay penalty
income of Baht 2.02 million, previous year income of Baht 21.42 million
and other income of Baht 15.18 million.

Analysis on changes in revenue structure

The net sales for the company for the year ended (April 2011-March 2012)
was Baht 26,223 million from sales volume of 1,139,000 ton (Year/April
2010-March 2011: Baht 26,761 million from sales volume of 1,289,000
ton), it is a decrease of 2% and 12%, respectively. While the sale
volume decrease of 12% is attributed to floods in Q3 Fy12, company could
get higher prices and improved its product mix in Fy12 to restrict the
sales revenue shortfall to just 2% over last year.

The net sales for the company for the year ended (April 2010-March 2011)
at Baht 26,762 million from sales volume of 1,289,000 ton (Year/April
2009-March 2010: Baht 22,422 million from sales volume of 1,198,000) was
an increase of 19% and 8%, respectively. It is on account of increased
sales in special wire rods, continued rebar export demand from overseas
markets and consistent volume supported by regular LCWR customers. The
average selling price increased by 2,000 Baht per ton or 11%.

The net sales for the company for the year ended (April 2009-March 2010)
was Baht 22,422 million from sales volume of 1,198,000 ton (Year/April
2008-March 2009: Baht 29,353 million from sales volume of 1,112,000),
showing a decrease of 24% and an increase of 8%, respectively. The
average selling price for this year decreased by 7,700 Baht per ton or
29%.

Cost of goods sold and Gross profit margin

April 2011 - March 2012

Cost of goods sold of the Company and its subsidiaries was Baht
26,629.03 million, equivalent to 101.55% of total revenue from sales.
Gross profit margin accounted for (1.55%) of total revenue from sales.
This includes one time extraordinary expenses of Baht 408 Million.

April 2010 - March 2011

Cost of goods sold of the Company and its subsidiaries was Baht
26,858.63 million, equivalent to 100.36% of total revenue from sales.
Gross profit margin accounted for (0.36%) of total revenue from sales.

April 2009 - March 2010

Cost of goods sold of the Company and its subsidiaries was Baht
21,714.74 million, equivalent to 97% of total revenue from sales. Gross
profit margin accounted for 3% of total revenue from sales.

Analysis on changes in Cost of goods sold and Gross profit margin

For the period of April 2011 - March 2012, gross profit of the Company
and its subsidiaries represented a margin of (1.55%) owing to improved
sales realization by Baht 2300 per ton over last year. While the average
cost of goods sold (which includes an impact of Baht 408 Million as one
time expenditure on MBF Moth-ball in Apr’11-Mar’12 period and other
charges) showed an increase by Baht 2,600 per ton. Therefore, gross
profit margin decreased by Baht 300 per ton over last year.

For the period of April 2010 - March 2011, gross profit of the Company
and its subsidiaries represented a margin of (0.36%). This was due to
improved sales realization by baht 2000 per ton over last year. Since
the average cost of goods sold increased by Baht 2,700 per ton, it led
to gross profit margin decrease by Baht 700 per ton over last year.

For the period of April 2009 - March 2010, gross profit of the Company
and its subsidiaries represented a margin of 3%. Despite the huge drop
in the selling price by baht 7,700 per ton over last year, the gross
margin decreased by mere 1% since the drop in cost of goods was
restricted to Baht 5,100 per year leading to gross profit margin
decrease of 1 % over last year.

Net profit (Loss)

April 2011 - March 2012

Net loss of the Company and its subsidiaries was Baht 1,580.59 million.

April 2010 - March 2011

Net loss of the Company and its subsidiaries was Baht 976.02 million

April 2009 - March 20101

Net loss of the Company and its subsidiaries was Baht 54.40 million

Analysis on changes in the net profit

For the Period April 2011 - March 2012, net loss of the Company and
subsidiaries was Baht 1,580.59 million. When compared to net loss of
Baht 976.00 million in the previous year, it has increased by Baht
604.59 million. The difference is mainly due to one-time expenditure
฿415 Mn coming from moth ball of MBF and Deferred Tax Assets write-back
of ฿272 Mn on account of reduction in corporate tax rate.

For the Period April 2010 - March 2011, net loss of the Company and
subsidiaries was Baht 976.00 million. When compared to net loss of Baht
54.40 million in the previous year, it has increased by Baht 921.60
million. The difference is mainly due to increase in cost of goods sold
increase by Baht 2,700 per ton or 15%. Further, selling price increased
by Baht 2,000 per ton or 11% that led to gross profit decrease by 113%.

For the Period April 2009 - March 2010, net loss of the Company and
subsidiaries was Baht 54.40 million. When compared to net profit of Baht
81.93 million in the previous year, it was a decrease by Baht 136.33
million. The difference is mainly due to decrease in cost of goods sold
by Baht 5,100 per ton or 22%. Further, selling price decreased by Baht
7,700 per ton or 29% that led to gross profit decrease by 9%.

Financial status

Assets

Composition of assets

As at March 31, 2012, the Company and its subsidiaries had total assets
of Baht 22,959.90 million. It was composed of current assets, property,
plant and equipment (net) and other asset of Baht 8,485.01 million, Baht
9,646.05 million and Baht 4,828.84 million, respectively. Other assets
included goodwill of Baht 4,116.34 million, deferred tax assets of Baht
521.96 million, prepaid tax expenses of Baht 147.61 million, and others.

Asset Quality

As at March 31, 2012, the Company and its subsidiaries had trade
accounts receivable net of allowance for doubtful accounts in the amount
of Baht 807.07 million, 92.98% of which was from unrelated parties and
7.02% were from related parties. With respect to the quality of the
Company’s trade accounts receivable, it was regarded as “good”
indicating that 99% of aging of trade accounts receivables was less than
three months, which implied the average of the Company’s credit term
offered to customers.

Months old. The Company and its subsidiaries have set a policy for
provision for doubtful accounts based on an estimate of receivables
expectedly uncollectible using historical collection experience and
review of current status of existing receivables. As at March 31, 2012,
the Company and its subsidiaries set aside a provision for doubtful
accounts amounting to Baht 696.69 million, equivalent to 46.33% of total
trade accounts receivable, all of which was against NTS’ trade accounts
receivable accumulated prior to the merger.

In addition, as at March 31, 2012, the Company had set allowance for
diminution in value of inventory, for obsolescence and slow-moving items
of Baht 298.70 million, The provision was in conjunction with Thai
Accounting Standard No. 36 “Re: Impairment”. The Company and its
subsidiaries will review such impairment on an annual basis.

Liquidity

As at March 31, 2012, the Company and its subsidiaries had a net
decrease in cash and cash equivalents of Baht 340.27 million from
previous year. The change was due to an decrease in net cash from
operating activities amounting to Baht 481.00 million, which was
explained by the amount of operating profit before changes in operating
assets and liabilities of Baht 257.98 million, and an increase in
changes in operating assets and liabilities of Baht 738.97 million
largely due to the addition in inventory and decreasing in trade
accounts payable, decreasing in other assets. With respect to investing
activities, a net cash flow of Baht 139.94 million was additional
investment in fixed assets while net cash of Baht 280.67 million was
paid for financing activities in respect of short–term loan draw down of
Baht 830.67 million and long-term loan repayment of Bath 550.00 million.

As at March 31, 2011, the Company and its subsidiaries had a net
decrease in cash and cash equivalents of Baht 1,281.74 million from
previous year. The change was due to an decrease in net cash from
operating activities amounting to Baht 667.32 million, which was
explained by the amount of operating profit before changes in operating
assets and liabilities of Baht 326.60 million, and an increase in
changes in operating assets and liabilities of Baht 993.92 million
largely due to the addition in inventory and trade accounts receivable,
decreasing in other asset , With respect to investing activities, a net
cash flow of Baht 123.21 million was additional investment in fixed
assets while net cash of Baht 491.21 million was paid for financing
activities in respect of long–term loan draw down of Baht 421.39million
and long-term loan repayment of Bath 900.00 million.

As at March 31, 2010, the Company and its subsidiaries had a net
decrease in cash and cash equivalents of Baht 1,059.17 million from
previous year. The change was due to an decrease in net cash from
operating activities amounting to Baht 151.07 million, which was
explained by the amount of operating profit before changes in operating
assets and liabilities of Baht 1,011.53 million, and an increase in
changes in operating assets and liabilities of Baht 1,162.60 million
largely due to the addition in inventory and trade accounts payable as
well as a decrease in trade accounts receivable. With respect to
investing activities, a net cash flow of Baht 1,020.24 million was
largely for additional investment in fixed assets while net cash of Baht
112.15 million was received for financing activities in respect of
long–term loan draw down of Baht 751.81million and long-term loan
repayment of Bath 625.00 million.

The Company’s current ratio was good, as evidenced by its 2.21 times,
1.91 times and 1.70 times during the year ending March 2010, 2011 and
2012, respectively. This is a result of cash flow from operating
activities. The liquidity trend decreased due to decrease in receivable
and Cash holdings reducing.

Sources of Capital Funds

Appropriateness of capital structure

As at March 31, 2012, the Company and its subsidiaries’ had a debt to
equity ratio of 0.70 times while it was 0.65 times in 2011.

Shareholders’ equity

As at March 31, 2012, the Company and its subsidiaries had shareholders’
equity of Baht 13,527.36 million consisting of the paid-up capital from
ordinary shares and preferred shares totaling Baht 11,680.16 million,
accounting for 86% of its shareholders’ equity. The retained earnings
was Baht 1,389.64 million and the legal reserve increased to Baht 327.22
million.

Liabilities

As at March 31, 2012, the Company and its subsidiaries had liabilities
amounting to Baht 9,432.54 million consisting of current liabilities of
Baht 4,980.01 million and Baht 4,452.53 million for non-current
liabilities, representing 53% and 47% of total liabilities,
respectively. Non-current liabilities included long-term loan from
financial institutions of Baht 4,325.00 million, and other liabilities
of Baht 127.53 million.

On November 29, 2006, the Company entered into two long-term credit
facilities agreements with two commercial banks. The facilities included
long-term loan agreement for refinance of existing long-term loan of the
Company and its subsidiaries which was due in seven years from the date
of the first drawdown totaling Baht 5,000 million. The interest rate was
at the average MLR -1.25% per annum. The other facility amounting to
Baht 6,290 million was working capital facilities, with Minimum
Overdraft Rate (MOR) interest rate for overdraft, whereas interest rate
for Promissory Notes was MMR the same as those of the remaining working
capital lines which included Trusts Receipt (T/R).

In addition, under the said two long-term credit facilities agreements,
the Company must maintain its financial ratios in accordance with the
covenants in that Interest Coverage Ratio were no less than 1.0 time and
1.2 times and Debt to Equity Ratio was no higher than 1.5 times and 2
times, respectively for each agreement.

As at March 31, 2012 the Interest Coverage Ratio was 0.30 times less
than bank’s covenants. However, Banks have given consent letter for
waiver for Mach 31, 2012. Debt to Equity Ratio was 0.70 times.

The collateral under long-term credit facilities with two commercial
banks were NTS’s land, building, construction, machinery, excluding its
Mini Blast Furnace Project’s assets, and assignment of insurance of its
three subsidiaries, in proportion to the credit line from each
commercial bank.

On November 9, 2007, the Company entered into two long-term credit
facilities agreements with two commercial banks. The facilities included
long-term loan agreement for investment in the Mini Blast Furnace
project, which was due in 7 years from the date of the first drawdown
totaling Baht 3,500 million. The interest rate was at the average MLR
-2.0% per annum. In addition, under the said two long-term credit
facilities agreements, the Company must maintain its financial ratios in
accordance with the covenants in that

Interest Coverage Ratio were no less than 1.2 times and Debt to Equity
Ratio was no higher than 1.5 times, respectively for each agreement, for
the year ended March 31, 2012 and 2011, the Company has withdrawn loans
totaling baht 3,500 million and Baht 3,500 million, respectively.

As at March 31, 2012 the Interest Coverage Ratio was 0.30 times less
than bank’s covenants. However, Banks have given consent letter for
waiver for Mach 31,2012. Debt to Equity Ratio was 0.70 times.

The collateral under long-term credit facilities with two commercial
banks were NTS’s land, building, construction, machinery and assignment
of insurance of its Mini Blast Furnace Project, in proportion to the
credit line from each commercial bank.

On November 2010, the Company made the supplement to the loan agreement
in order to extend the first repayment for one more year, starting from
November 2010 to August 2015

Vide letter dated November 21, 2011, the Company appealed for
installment deferment of the next four quarterly bank loan installment
repayment commencing November 2011 to be due in November 2012 to its two
lenders. The rationalization was due to the business interruption the
recent flood disaster have had on the overall business. There has been
serious impact on the business environment in several areas. Lenders
have granted the loan repayment deferment where the next installment of
loan repayment is due in November 2012.

Major factors potentially affecting its operation and financial status
in the future

Contingent Liabilities potentially affecting its operation and financial
status in the future

As of March 31, 2012, the Company had contingent liabilities as follows:

1.  Its subsidiaries had Letter of Credit (L/C) amounting to Baht 135
    million opened but were not under the liabilities’ condition.

2.  Letters of guarantee issued by the commercial banks to the Revenue
    Department mounting Baht 758 million.

3.  Its subsidiaries had obligations under the purchase and installation
    agreement of machineries totaling of Baht 185 million

4.  The Company and its subsidiaries had obligations under lease
    agreements (including service fees) amounting to Baht 111 million.

Other factors potentially affecting Company’s operation and financial
status in the future

Other factors that may affect Company’s operation and financial status
in the future are shown as the risk in item “Risk Factors”, page 18 and
item “Notes to Financial Statements”, No. 26 Re: Financial Instruments.

Auditor remuneration

Audit Fee

For the period April 2011 - March 2012, the Company and its subsidiaries
paid audit fees of Baht 4,080,000.

Non-audit Fee

For the period of April 2011 - March 2012, the Company and its
subsidiaries paid fee of Baht 1,796,855 to its auditor, the audit firm
affiliated with the auditor, individuals or business entities related to
the auditor and its affiliated audit firm. In addition, there were no
other fees to be paid in the future due to incomplete transactions
incurred in current period.