3. Business Description Overview

Significant Developments and Changes

During fiscal year 2009-2010, there are several significant developments
and changes:

+---------------+------------------------------------------------------+
|   2009        |                                                      |
+---------------+------------------------------------------------------+
|   February    | -   NTS and SCSC were certified with the AS/NZS 4671 |
|               |     standard for re-bars production exported to      |
|               |     Australia from ACRS (Australian Certification    |
|               |     Authority for Reinforcing Steel Ltd)             |
+---------------+------------------------------------------------------+
|   October     | -   The 2^(nd) Blast Furnace project (“Mini Blast    |
|               |     Furnace”) which is steel production project      |
|               |     using iron ore as raw material with production   |
|               |     capacity of 500,000 tons per annum was           |
|               |     completed. This project is considered the first  |
|               |     of its kind in Thailand and South East Asia.     |
|               |                                                      |
|               | -   Evaluation was conducted in compliant with the   |
|               |     standard of Tata Business Excellence Model       |
|               |     (TBEM). The concept and procedure is aimed to    |
|               |     guide all companies within Tata group to be      |
|               |     capable of developing their organization for     |
|               |     readiness for global competition and leveraging  |
|               |     the Company to the world class rank of “Good     |
|               |     Performance”                                     |
+---------------+------------------------------------------------------+
|   2010        |                                                      |
+---------------+------------------------------------------------------+
|   January     | -   Was selected as company with corporate           |
|               |     governance ranking of “Excellent” from the       |
|               |     survey report of evaluation on corporate         |
|               |     governance procedures of listed companies under  |
|               |     the name of “Corporate Governance Report of Thai |
|               |     Listed Companies 2009” organized by the          |
|               |     Institute of Directors (IOD) in conjunction with |
|               |     the Securities Exchange of Thailand and the      |
|               |     Office of the Securities Exchange Commission     |
|               |     (SEC)                                            |
+---------------+------------------------------------------------------+
|   March       | -   NTS and SCSC were certified with the IS 1786 :   |
|               |     2008 standard for rebars production exported to  |
|               |     India from BIS (Bureau of Indian Standards)      |
+---------------+------------------------------------------------------+

In March 2006, the Company’s major shareholding was transferred from
Siam Cement Holding Company Limited (“CHC”) to Indian national Tata
Steel Group as a result of CHC‘s agreement to sell all its shareholding
to the Tata Steel Group, currently in the name of Tata Steel Global
Holdings Pte. Ltd., totaling to 5,718,472,083 shares or 67.90% of the
Paid Up shares.

Overview of the Company and its subsidiaries business operation

The Company operates its business as a Holding Company with shareholding
in 3 subsidiaries namely the NTS, SISC and SCSC. The 3 subsidiaries are
producers of rebars, wire rods and small sections steel.

The Company’s operation is undertaken as a group with the Company as the
top policy maker and the 3 subsidiaries would be responsible for
carrying out the operation according to the prescribed policy of the
Company with regard to marketing, production plans, raw materials
sourcing, finance, human resources management and other aspects of
administration.

The Company’s major shareholder is the Tata Steel Global Holdings Pte.
Ltd. (“TSGH”), which is wholly owned by Tata Steel Limited (“TSL”),
which operates its business as an investment company with head office in
Singapore. TSL is a registered company incorporated under Indian Laws
and is one of India’s largest and comprehensive steel producers in terms
of production capacity. The products include Hot rolled coil, Cold
rolled coil, Sheet, Rebar, Wire rod etc. The target customers of TSL are
mainly in India, whereas the Company’s target customers are
approximately 90% domestic while exports are of different types of
products. Though TSL is in the same steel industry as the Company, but
its product lines are much more diversified and cater to different group
of customers. TSL has an aim to support its affiliate in business
operation which would help strengthen Company’s potentiality without
creating any conflict of interest.

Policy on division of operation between companies within the group

The Company has a policy to allocate production capacity of each
subsidiary for maximum production effectiveness with the aim to maintain
the cost of production at the lowest level. The production capacity of
each product is allocated as follows:

1)  NTS would produce rebar and wire rods.

2)  SISC would mainly produce high value products such as High Carbon
    Wire Rods, Special Wire Rods and Small Sections.

3)  SCSC would produce rebar.

Moreover, the Company concerned about the adjustment of productivity
allocation to suit the situation for maximum benefit of the Company
Groups such as market and industry conditions, including effective use
of the machinery.

Shareholding Structure

+-----------------------------+---------+-----------+-----------------+
| Subsidiary                  | Paid up | Business  | Product         |
|                             | Capital | Type      |                 |
|                             |         |           |                 |
|                             | (       |           |                 |
|                             | Million |           |                 |
|                             | Baht)   |           |                 |
|                             |         |           |                 |
|                             | As at   |           |                 |
|                             |         |           |                 |
|                             | March   |           |                 |
|                             | 31,     |           |                 |
|                             | 2010    |           |                 |
+-----------------------------+---------+-----------+-----------------+
| N.T.S. Steel Group Plc.     | 3       | Ma        | Rebars and wire |
| (“NTS”)                     | ,253.40 | nufacture | rods            |
|                             |         | steel     |                 |
+-----------------------------+---------+-----------+-----------------+
| The Siam Iron and Steel     | 120.00  | Ma        | Wire rods and   |
| (2001) Co., Ltd. (“SISC”)   |         | nufacture | small sections  |
|                             |         | steel     |                 |
+-----------------------------+---------+-----------+-----------------+
| The Siam Construction Steel | 1       | Ma        | Rebars          |
| Co.,Ltd. (“SCSC”)           | ,750.00 | nufacture |                 |
|                             |         | steel     |                 |
+-----------------------------+---------+-----------+-----------------+

Structure of Revenue

The proportions of the Company’s revenue from the sales by product
lines, as produced by subsidiaries, are as follows:

  ------------------ -- -- ---------- -------- -------- ---------- -- --------- --------- -------- ---------- -------- --------- --------- --------
                           Audited                                    Audited                                          Audited             

  Line of Products         Year                                       Year                                             Year                
                           2009 -                                     2008 -                                           2007 -              
                           2010                                       2009                                             2008                

                           (Million            %        (Million                          %        (Million                                %
                           Baht)                        Baht)                                      Baht)                                   

                                                                                                                                           

  Domestic Market                                                                                                                          

  Rebars                   11,444              51.04                            16,896    57.56               19,321                       62.04

  Wire Rods                7,704               34.36                            7,684     26.18               7,808                        25.07

  Small Sections           617                 2.75                             885       3.02                1,188                        3.82

  Others & Billets         127                 0.57                             349       1.18                175                          0.56

  Total Revenues           19,892              88.72                            25,814    87.94               28,492                       91.50
  from Domestic                                                                                                                            
  Sales                                                                                                                                    

                                                                                                                                           

  Exports                                                                                                                                  

  Rebars                   980                 4.37                             2,409     8.2                 1,764                        5.66

  Wire Rods                1,538               6.86                             805       2.74                229                          0.73

  Small Sections           -                   -                                3         0.01                -                            -

  Others & Billets         12                  0.05                             322       1.10     -          654                          2.10

  Total Revenues           2,530               11.28                            3,539     12.06               2,647                        8.50
  from Exports                                                                                                                             

                                                                                                                                           

  Total Revenues                      22,422   100.00                           29,353    100.00                                 31,139    100.00
  ------------------ -- -- ---------- -------- -------- ---------- -- --------- --------- -------- ---------- -------- --------- --------- --------