Section 1

13. Financial Status and Performance

1.  Financial Statements

Summary of Audit Report

  Reports of Certified Public Accountant on the consolidated financial
  statements for the year ended March 31, 2009 and 2008 was audited by
  Mr. Montree Panichakul of Deloitte Touche Tohmatsu Jaiyos Audit Co.,
  Ltd. and for the years ended March 31, 2007 was audited by Mr. Pisit
  Chiwaruangroch of KPMG Poomchai Audit Limited who expressed an
  unqualified opinion on those financial statements that these financial
  statements were presented fairly in all material respects in
  accordance with generally accepted accounting principles.

  At the extraordinary shareholders’ meeting held on December 8, 2006,
  the shareholders approved to change the fiscal year of the Company to
  commence on April 1 and end on March 31 with effect from the fiscal
  year of 2007.

  Summary of the consolidated financial statements for the years ended
  March 31, 2009,March 31,2008, March 31, 2007 is presented below:

+--------------------------------------+---------+---------+---------+
|                                      |         | (Unit:  |         |
|                                      |         | Baht    |         |
|                                      |         | m       |         |
|                                      |         | illion) |         |
+--------------------------------------+---------+---------+---------+
| Transactions                         | 2009    | 2008    | 2007*   |
+--------------------------------------+---------+---------+---------+
| Balance Sheets                       |         |         |         |
+--------------------------------------+---------+---------+---------+
| Cash and cash equivalents            | 3       | 2       | 36.41   |
|                                      | ,151.90 | ,598.37 |         |
+--------------------------------------+---------+---------+---------+
| Trade accounts receivable - net      | 508.89  | 2       | 2       |
|                                      |         | ,389.94 | ,139.99 |
+--------------------------------------+---------+---------+---------+
| Recei                                | 0.38    | 0.57    | 1.31    |
| vables and loans – related companies |         |         |         |
+--------------------------------------+---------+---------+---------+
| Inventories                          | 5       | 4       | 4       |
|                                      | ,085.86 | ,774.15 | ,405.89 |
+--------------------------------------+---------+---------+---------+
| Other current assets                 | 405.00  | 45.05   | 101.98  |
+--------------------------------------+---------+---------+---------+
| Property, plant and equipment – net  | 11      | 9       | 9       |
|                                      | ,129.26 | ,236.47 | ,624.08 |
+--------------------------------------+---------+---------+---------+
| Other assets                         | 4       | 4       | 4       |
|                                      | ,746.60 | ,378.80 | ,507.31 |
+--------------------------------------+---------+---------+---------+
| Total assets                         | 25      | 23      | 20      |
|                                      | ,027.89 | ,423.35 | ,816.97 |
+--------------------------------------+---------+---------+---------+
|                                      |         |         |         |
+--------------------------------------+---------+---------+---------+
| B                                    | 1.92    | 135.38  | 94.56   |
| ank overdrafts and short-term loans  |         |         |         |
+--------------------------------------+---------+---------+---------+
| Trade accounts payable               | 1       | 610.16  | 597.75  |
|                                      | ,632.34 |         |         |
+--------------------------------------+---------+---------+---------+
| Curr                                 | 757.96  | 600.00  | 600.00  |
| ent portion of long-term liabilities |         |         |         |
+--------------------------------------+---------+---------+---------+
| Pa                                   | 24.67   | 21.99   | 25.04   |
| yables and loans – related companies |         |         |         |
+--------------------------------------+---------+---------+---------+
| Other current liabilities            | 649.81  | 887.53  | 451.09  |
+--------------------------------------+---------+---------+---------+
| Long-term loans                      | 5       | 4       | 4       |
|                                      | ,676.34 | ,358.81 | ,707.53 |
+--------------------------------------+---------+---------+---------+
| Other liabilities                    | 135.94  | 98.27   | 80.37   |
+--------------------------------------+---------+---------+---------+
| Total liabilities                    | 8       | 6       | 6       |
|                                      | ,878.98 | ,712.15 | ,556.34 |
+--------------------------------------+---------+---------+---------+
| * January - March 2007               |         |         |         |
+--------------------------------------+---------+---------+---------+

+--------------------------------------+---------+---------+---------+
|                                      |         | (Unit:  |         |
|                                      |         | Baht    |         |
|                                      |         | m       |         |
|                                      |         | illion) |         |
+--------------------------------------+---------+---------+---------+
| Transactions                         | 2009    | 2008    | 2007*   |
+--------------------------------------+---------+---------+---------+
| Balance Sheets (Cont.)               |         |         |         |
+--------------------------------------+---------+---------+---------+
| Registered share capital             | 11      | 11      | 11      |
|                                      | ,025.58 | ,025.58 | ,025.58 |
+--------------------------------------+---------+---------+---------+
| Paid-up capital                      |         |         |         |
+--------------------------------------+---------+---------+---------+
|  Preferred shares                    | 252.77  | 593.17  | 593.17  |
+--------------------------------------+---------+---------+---------+
|  Ordinary shares                     | 8       | 7       | 7       |
|                                      | ,168.77 | ,828.37 | ,828.37 |
+--------------------------------------+---------+---------+---------+
| Share premium                        | 3       | 3       | 3       |
|                                      | ,258.62 | ,258.62 | ,258.62 |
+--------------------------------------+---------+---------+---------+
| Warrants                             | 130.20  | 130.20  | 130.20  |
+--------------------------------------+---------+---------+---------+
| Convertible debentures               | -       | -       | -       |
+--------------------------------------+---------+---------+---------+
| Unrealized                           | 1.10    | 2.69    | 2.99    |
| gain from investment in subsidiaries |         |         |         |
+--------------------------------------+---------+---------+---------+
| Legal reserve                        | 283.10  | 276.59  | 107.05  |
+--------------------------------------+---------+---------+---------+
| Retained earnings (loss)             | 4       | 4       | 2       |
|                                      | ,044.75 | ,610.37 | ,331.49 |
+--------------------------------------+---------+---------+---------+
| Minority interest                    | 9.60    | 11.18   | 8.73    |
+--------------------------------------+---------+---------+---------+
| Total shareholders’ equity           | 16      | 16      | 14      |
|                                      | ,148.91 | ,711.21 | ,260.63 |
+--------------------------------------+---------+---------+---------+
|                                      |         |         |         |
+--------------------------------------+---------+---------+---------+
| Statements of Income                 |         |         |         |
+--------------------------------------+---------+---------+---------+
| Revenue from sales of goods          | 29      | 31      | 6       |
|                                      | ,352.78 | ,139.06 | ,149.02 |
+--------------------------------------+---------+---------+---------+
| Total revenues                       | 29      | 31      | 6       |
|                                      | ,443.21 | ,280.12 | ,169.81 |
+--------------------------------------+---------+---------+---------+
| Cost of goods sold                   | 28      | 26      | 5       |
|                                      | ,257.36 | ,601.80 | ,384.36 |
+--------------------------------------+---------+---------+---------+
| Gross profit                         | 1       | 4       | 764.66  |
|                                      | .095.42 | ,537.26 |         |
+--------------------------------------+---------+---------+---------+
| Selling and administrative expenses  | 857.82  | 1       | 228.21  |
|                                      |         | ,122.77 |         |
+--------------------------------------+---------+---------+---------+
| Interest expense                     | 221.79  | 268.42  | 84.78   |
+--------------------------------------+---------+---------+---------+
| Income tax                           | 26.89   | 583.59  | 80.17   |
+--------------------------------------+---------+---------+---------+
| Pr                                   | 79.35   | 2       | 392.29  |
| ofit (Loss) before minority interest |         | ,703.53 |         |
+--------------------------------------+---------+---------+---------+
| Net profit (Loss)                    | 80.93   | 2       | 392.02  |
|                                      |         | ,701.07 |         |
+--------------------------------------+---------+---------+---------+
| Earnings (Loss) per share – basic    | 0.01    | 0.32    | 0.05    |
+--------------------------------------+---------+---------+---------+
| * January - March 2007               |         |         |         |
+--------------------------------------+---------+---------+---------+

Tata Steel (Thailand) Public Company Limited

Statements of Cash Flows

For the years ended March 31, 2009, March 31 2008 and March 31, 2007

+---+-----------------------------------------+--------+--------+--------+
|   |                                         | (Unit: |        |        |
|   |                                         | Baht   |        |        |
|   |                                         | mi     |        |        |
|   |                                         | llion) |        |        |
+---+-----------------------------------------+--------+--------+--------+
| C |                                         | 2009   | 2008   | 2007*  |
| a |                                         |        |        |        |
| s |                                         |        |        |        |
| h |                                         |        |        |        |
| f |                                         |        |        |        |
| l |                                         |        |        |        |
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+---+-----------------------------------------+--------+--------+--------+
| N |                                         | 106.23 | 3,     | 392.02 |
| e |                                         |        | 287.13 |        |
| t |                                         |        |        |        |
| P |                                         |        |        |        |
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+---+-----------------------------------------+--------+--------+--------+
| R |                                         |        |        |        |
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+---+-----------------------------------------+--------+--------+--------+
|   | Unrealized loss (gain) on foreign       | 12.51  | (1.71) | (1.42) |
|   | exchange                                |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Reversal of allowance for doubtful      | (      | 19.64  | -      |
|   | accounts                                | 56.16) |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Reversal of allowance for inventory     | 25.96  | (6.63) | (0.13) |
|   | obsolescence                            |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Depreciation and amortization           | 839.18 | 821.85 | 184.01 |
+---+-----------------------------------------+--------+--------+--------+
|   | Goodwill amortization                   | -      | 280.62 | 70.16  |
+---+-----------------------------------------+--------+--------+--------+
|   | Provision for employee retirement       | 35.50  | 8.72   | (2.16) |
|   | benefit                                 |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Loss from writing off fixed assets      | 26.50  | 32.93  | -      |
+---+-----------------------------------------+--------+--------+--------+
|   | Loss from impairment of fixed assets    | 0.12   | 48.08  | -      |
+---+-----------------------------------------+--------+--------+--------+
|   | Interest income                         | (      | (      | (0.63) |
|   |                                         | 54.41) | 20.50) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Interest expense and financial charges  | 221.79 | 268.42 | 84.78  |
+---+-----------------------------------------+--------+--------+--------+
|   | Loss (Gain) from sale of property and   | (0.48) | (      | 0.02   |
|   | equipment                               |        | 37.16) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Minority interest in loss of            | -      | -      | 0.27   |
|   | subsidiaries                            |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Income tax expense                      | -      | -      | 80.17  |
+---+-----------------------------------------+--------+--------+--------+
|   | Trade accounts receivable and           | 1,     | (2     | (5     |
|   | receivables from related companies      | 936.18 | 46.74) | 92.59) |
+---+-----------------------------------------+--------+--------+--------+
|   | Inventories-net                         | (3     | (4     | 196.53 |
|   |                                         | 65.93) | 01.30) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Other current assets                    | (3     | 34.02  | (1.75) |
|   |                                         | 60.28) |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Other non-current assets                | (      | 15.78  | (2.26) |
|   |                                         | 29.26) |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Trade accounts payable and payables to  | 1,     | 11.07  | (3     |
|   | related companies                       | 013.57 |        | 32.85) |
+---+-----------------------------------------+--------+--------+--------+
|   | Accrued expenses and other current      | 188.16 | (      | 229.81 |
|   | liabilities                             |        | 35.05) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Income tax paid                         | (7     | (1     | (3.53) |
|   |                                         | 41.61) | 60.47) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Interest paid                           | (2     | (2     | -      |
|   |                                         | 21.75) | 69.03) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Net cash provided by operating          | 2,     | 3,     | 300.18 |
|   | activities                              | 575.82 | 649.67 |        |
+---+-----------------------------------------+--------+--------+--------+
| C |                                         |        |        |        |
| a |                                         |        |        |        |
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+---+-----------------------------------------+--------+--------+--------+
|   | Interest received                       | 54.73  | 21.33  | -      |
+---+-----------------------------------------+--------+--------+--------+
|   | ส่วนของผู้ถือหุ้นส่วนน้อย                       |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Purchase of property, plant and         | 3,     | 2,     | -      |
|   | equipment                               | 151.90 | 598.37 |        |
+---+-----------------------------------------+--------+--------+--------+
|   | ค่าความนิยม                               |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | สินทรัพย์รอการขาย                          |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Sale of property and equipment          | (2,7   | (6     | (      |
|   |                                         | 62.57) | 27.00) | 96.55) |
+---+-----------------------------------------+--------+--------+--------+
|   | Net cash provided by (used in)          | (2,7   | (5     | (      |
|   | investing activities                    | 07.11) | 25.13) | 86.66) |
+---+-----------------------------------------+--------+--------+--------+
| * |                                         |        |        |        |
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+---+-----------------------------------------+--------+--------+--------+
|   |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
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+---+-----------------------------------------+--------+--------+--------+
|   |                                         | (Unit: |        |        |
|   |                                         | Baht   |        |        |
|   |                                         | mi     |        |        |
|   |                                         | llion) |        |        |
+---+-----------------------------------------+--------+--------+--------+
| C |                                         | 2008   | 2008   | 2007*  |
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| n |                                         |        |        |        |
| a |                                         |        |        |        |
| n |                                         |        |        |        |
| c |                                         |        |        |        |
| i |                                         |        |        |        |
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| g |                                         |        |        |        |
| a |                                         |        |        |        |
| c |                                         |        |        |        |
| t |                                         |        |        |        |
| i |                                         |        |        |        |
| v |                                         |        |        |        |
| i |                                         |        |        |        |
| t |                                         |        |        |        |
| i |                                         |        |        |        |
| e |                                         |        |        |        |
| s |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Interest paid and financial charges     | -      | -      | (      |
|   |                                         |        |        | 85.40) |
+---+-----------------------------------------+--------+--------+--------+
|   | Cash paid for financial lease           | (      | (2.03) | -      |
|   |                                         | 17.17) |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Increase in bank overdrafts and         | (1     | 40.81  | (      |
|   | short-term loans from financial         | 33.46) |        | 12.54) |
|   | institutions                            |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Repayment of long-term loans            | (6     | (6     | (1     |
|   |                                         | 00.00) | 00.00) | 50.00) |
+---+-----------------------------------------+--------+--------+--------+
|   | Payment of long-term debt to related    | -      | -      | -      |
|   | company                                 |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Trade accounts payable arising from     | -      | (0.03) | (0.14) |
|   | debt restructuring                      |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | เงินกู้ยืมระยะยาวจากการปรับโครงสร้างหนี้        |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Proceeds from long-term loans           | 2,     | 251.31 | -      |
|   |                                         | 075.49 |        |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Payment of dividend                     | (6     | (2     | -      |
|   |                                         | 40.03) | 52.64) |        |
+---+-----------------------------------------+--------+--------+--------+
|   | Capital increase                        | -      | -      | -      |
+---+-----------------------------------------+--------+--------+--------+
|   | Net cash provided by (used in)          | 684.83 | 562.58 | (2     |
|   | financing activities                    |        |        | 48.08) |
+---+-----------------------------------------+--------+--------+--------+
|   |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
| N |                                         | 553.53 | 2,     | (      |
| e |                                         |        | 561.96 | 44.44) |
| t |                                         |        |        |        |
| i |                                         |        |        |        |
| n |                                         |        |        |        |
| c |                                         |        |        |        |
| r |                                         |        |        |        |
| e |                                         |        |        |        |
| a |                                         |        |        |        |
| s |                                         |        |        |        |
| e |                                         |        |        |        |
| i |                                         |        |        |        |
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| c |                                         |        |        |        |
| a |                                         |        |        |        |
| s |                                         |        |        |        |
| h |                                         |        |        |        |
| a |                                         |        |        |        |
| n |                                         |        |        |        |
| d |                                         |        |        |        |
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| a |                                         |        |        |        |
| s |                                         |        |        |        |
| h |                                         |        |        |        |
| e |                                         |        |        |        |
| q |                                         |        |        |        |
| u |                                         |        |        |        |
| i |                                         |        |        |        |
| v |                                         |        |        |        |
| a |                                         |        |        |        |
| l |                                         |        |        |        |
| e |                                         |        |        |        |
| n |                                         |        |        |        |
| t |                                         |        |        |        |
| s |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
| C |                                         | 2,     | 36.41  | 80.86  |
| a |                                         | 598.37 |        |        |
| s |                                         |        |        |        |
| h |                                         |        |        |        |
| a |                                         |        |        |        |
| n |                                         |        |        |        |
| d |                                         |        |        |        |
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| s |                                         |        |        |        |
| h |                                         |        |        |        |
| e |                                         |        |        |        |
| q |                                         |        |        |        |
| u |                                         |        |        |        |
| i |                                         |        |        |        |
| v |                                         |        |        |        |
| a |                                         |        |        |        |
| l |                                         |        |        |        |
| e |                                         |        |        |        |
| n |                                         |        |        |        |
| t |                                         |        |        |        |
| s |                                         |        |        |        |
| a |                                         |        |        |        |
| t |                                         |        |        |        |
| b |                                         |        |        |        |
| e |                                         |        |        |        |
| g |                                         |        |        |        |
| i |                                         |        |        |        |
| n |                                         |        |        |        |
| n |                                         |        |        |        |
| i |                                         |        |        |        |
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| g |                                         |        |        |        |
| o |                                         |        |        |        |
| f |                                         |        |        |        |
| y |                                         |        |        |        |
| e |                                         |        |        |        |
| a |                                         |        |        |        |
| r |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
| C |                                         | 3,     | 2,     | 36.41  |
| a |                                         | 151.90 | 598.37 |        |
| s |                                         |        |        |        |
| h |                                         |        |        |        |
| a |                                         |        |        |        |
| n |                                         |        |        |        |
| d |                                         |        |        |        |
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| h |                                         |        |        |        |
| e |                                         |        |        |        |
| q |                                         |        |        |        |
| u |                                         |        |        |        |
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| a |                                         |        |        |        |
| l |                                         |        |        |        |
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| t |                                         |        |        |        |
| s |                                         |        |        |        |
| a |                                         |        |        |        |
| t |                                         |        |        |        |
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| n |                                         |        |        |        |
| d |                                         |        |        |        |
| o |                                         |        |        |        |
| f |                                         |        |        |        |
| y |                                         |        |        |        |
| e |                                         |        |        |        |
| a |                                         |        |        |        |
| r |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+
| * |                                         |        |        |        |
| J |                                         |        |        |        |
| a |                                         |        |        |        |
| n |                                         |        |        |        |
| u |                                         |        |        |        |
| a |                                         |        |        |        |
| r |                                         |        |        |        |
| y |                                         |        |        |        |
|   |                                         |        |        |        |
| - |                                         |        |        |        |
| M |                                         |        |        |        |
| a |                                         |        |        |        |
| r |                                         |        |        |        |
| c |                                         |        |        |        |
| h |                                         |        |        |        |
| 2 |                                         |        |        |        |
| 0 |                                         |        |        |        |
| 0 |                                         |        |        |        |
| 7 |                                         |        |        |        |
+---+-----------------------------------------+--------+--------+--------+

Financial Ratios

+-------------------------------------------+--------+--------+--------+
| Financial Ratios                          | 2009   | 2008   | 2007*  |
+-------------------------------------------+--------+--------+--------+
| Liquidity ratio                           |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Current ratio (times)                    | 2.98   | 4.35   | 3.78   |
+-------------------------------------------+--------+--------+--------+
|  Quick acid ratio (times)                 | 1.19   | 2.21   | 1.23   |
+-------------------------------------------+--------+--------+--------+
| Capacity of assets utilization ratio      |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Accounts receivable turnover (times)     | 20.25  | 13.75  | 3.33   |
+-------------------------------------------+--------+--------+--------+
|  Accounts receivable collection (days)    | 18     | 26     | 27     |
+-------------------------------------------+--------+--------+--------+
|  Inventory turnover (times)               | 30.59  | 22.55  | 4.19   |
+-------------------------------------------+--------+--------+--------+
|  Fixed asset turnover (times)             | 2.83   | 3.32   | 0.64   |
+-------------------------------------------+--------+--------+--------+
|  Total asset turnover (times)             | 1.21   | 1.41   | 0.30   |
+-------------------------------------------+--------+--------+--------+
| Coverage ratio                            |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Debt ratio (%)                           | 35     | 29     | 32     |
+-------------------------------------------+--------+--------+--------+
|  Interest Coverage ratio (times)          | 5.22   | 17.09  | 9.52   |
+-------------------------------------------+--------+--------+--------+
|  Debt to Equity ratio (times)             | 0.55   | 0.40   | 0.46   |
+-------------------------------------------+--------+--------+--------+
| Efficiency ratio                          |        |        |        |
+-------------------------------------------+--------+--------+--------+
|  Net profit margin (%)                    | 0.3    | 9      | 6      |
+-------------------------------------------+--------+--------+--------+
|  Return on total assets (%)               | 0.3    | 12     | 2      |
+-------------------------------------------+--------+--------+--------+
|  Return on equity (%)                     | 0.5    | 17     | 3      |
+-------------------------------------------+--------+--------+--------+
|  Gross Profit margin (%)                  | 4      | 15     | 12     |
+-------------------------------------------+--------+--------+--------+
|  Operating profit margin (%)              | 1      | 11     | 9      |
+-------------------------------------------+--------+--------+--------+
| * January - March 2007                    |        |        |        |
+-------------------------------------------+--------+--------+--------+

13.2 Management Discussion & Analysis

Financial Performance

Revenues

Year 2008 - 2009 (April 2008 - March 2009)

  Revenue from sales of the Company and its subsidiaries was Baht
  29,352.78 million, 55% and 26% of which were generated domestically
  through of the rebars and wire rods, respectively. The other 12% was
  generated through international sales.

  Other income of the Company and its subsidiaries amounted to Baht
  90.43 million, representing 0.31 % of total revenues. It comprised
  mainly of interest income of Baht 54.41, gain from store sales of Baht
  6.09 million, delay penalty income of baht 4.99 million and other
  income 29.47 million.

Year 2007 - 2008 (April 2007 - March 2008)

  Revenue from sales of the Company and its subsidiaries was Baht
  31,139.06 million, 66% and 26% of which were generated domestically
  through of the rebars and wire rods, respectively. The other 8% was
  generated through international sales.

  Other income of the Company and its subsidiaries amounted to Baht
  141.06 million, representing 0.45% of total revenues. It comprised
  mainly of gain from store sales of Baht 43.55 million, land sales of
  subsidiaries of Baht 42.82 million, gain from exchange rate of Baht
  34.14 million and interest income of Baht 20.50 million.

The period of January - March 2007

  Revenue from sales of the Company and its subsidiaries was Baht
  6,149.02 million, 66% and 26% of which were generated domestically
  through rebars and wire rods, respectively. The other 8% generated
  through international sales.

  Other income of the Company and its subsidiaries amounted to Baht
  20.79 million, representing 0.34% of total revenues. It comprised
  mainly of gain from store sales of Baht 10.56 million, gain from
  exchange rate of Baht 9.60 million and interest income of Baht 0.63
  million.

  Analysis on changes in revenue structure

  Net sales for period April 2008 – March 2009 was Baht 29,353.78
  million, decreased from Baht 31,139.06 million earned for period April
  2007 – March 2008. This was attributable to the overall sales volume
  which decreased by 6%.The main reason is on account of falling demand
  in global steel market which continuously effected from the global
  economy crisis. The sales volume was decreased by 321,000 tons from
  domestic economic slowdown. While the average selling price of this
  year was Baht 26,400 per ton or increase by Baht 4,700 per ton. The
  main reason was the continuously increasing of scrap and billet prices
  as well as steel bar market price.

  Net sales for period April 2007 – March 2008 was Baht 31,139.06
  million, increased from Baht 20,470 million earned for period April
  2006 – March 2007. This was attributable to the overall sales volume
  which increased by 52% y-o-y as a result of increase of sales volume
  and sales price. The average selling price of this year was Baht
  21,726 per ton or increased by Baht 3,400 per ton. The main reason was
  the continuously increasing scrap and billet prices as well as steel
  bar market price.

  Net sales for the period of January - March 2007 was Bath 6,149.02
  million, increased from Baht 4,511.60 million earned for period
  October - December 2006, representing an increase in net sales of 36%
  due to the increasing sales volume. This was achieved from the sales
  season in the early of the year comprise with the readiness to sales
  due to having sufficient raw materials from last quarter. At the same
  time, the competitors had insufficient goods as they receded ordering
  raw materials due to the fluctuation of raw material market price.
  Meanwhile, the average selling price decreased from the last quarter
  due to the imports of low selling price steel from China had affected
  the market selling price to decrease.

  Cost of goods sold and Gross profit margin

  Year 2008 - 2009 (April 2008 - March 2009)

  Cost of goods sold of the Company and its subsidiaries was Baht
  28,275.36 million, equivalent to 96% of total revenue from sales.
  Gross profit margin accounted for 4% of total revenue from sales.

  Year 2007 - 2008 (April 2007 - March 2008)

  Cost of goods sold of the Company and its subsidiaries was Baht
  26,601.80 million, equivalent to 85% of total revenue from sales.
  Gross profit margin accounted for 15% of total revenue from sales.

  The period of January - March 2007

  Cost of goods sold of the Company and its subsidiaries was Baht
  5,384.36 million, equivalent to 88% of total revenue from sales. Gross
  profit margin accounted for 12% of total revenue from sales.

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

  For the period of April 2008 - March 2009, gross profit of the Company
  and its subsidiaries represented a margin of 4% as a result of the
  average selling price of this year was Baht 26,400 per ton or increase
  by Baht 4,700 per ton. While the average cost of goods sold was
  increased by Baht 6,400 per ton. Therefore, gross profit margin
  decrease of 11 % from last year.

  For the period of April 2007 - March 2008, gross profit of the Company
  and its subsidiaries represented a margin of 15% as a result of an
  average selling price increased more than average cost in amount of
  Baht 3,100 per ton and higher than last year at Baht 3,400 per ton.
  Through various improvement initiatives in operation, the Company
  increased its production in volume 243,000 tons, while simultaneously
  contained cost of input material by improved commercial practices in
  the area of steel scrap sourcing.

  For the period of January 2007 - March 2007, gross profit of the
  Company and its subsidiaries represented a margin of 12% as a result
  of increasing of average selling price more than average cost in
  amount Baht 500 per ton. This was achieved from the sales season in
  the early of the year.

  Net profit (Loss)

Year 2008 - 2009 (April 2008 - March 2009)

  Net profit of the Company and its subsidiaries was Baht 80.93 million,
  attributable to revenue from sales totaling Baht 29,352.78 million as
  a result of interest income of Baht 54.41 million, gain from store
  sales of Baht 6.09 million, delay penalty income of baht 4.99 million
  and other income baht 29.47 million.

Year 2007 - 2008 (April 2007 - March 2008)

  Net profit of the Company and its subsidiaries was Baht 2,701.07
  million, attributable to revenue from sales totaling Baht 31,139.06
  million as a result of store sales of Baht 43.55 million, land sales
  of subsidiaries of Baht 42.82 million, gain from exchange rate of Baht
  34.14 million and interest income of Baht 20.50 million.

  The period of January - March 2007

  Net profit of the Company and its subsidiaries was Baht 392.02
  million, attributable to revenue from sales totaling Baht 6,149.02
  million as a result of store sales of Baht 10.56 million, gain from
  exchange rate of Baht 9.60 million and interest income of Baht 0.63
  million.

  Analysis on changes in the net profit

  For the Period April 2008 - March 2009, net profit of the Company and
  subsidiaries was Baht 80.93 million, an decrease of Baht 2,620.14
  million compared to Baht 2,701.07 million for April 2007 - March 2008.
  In the previous year, resulting in sales volume decreased by 321,000
  tons and average cost of goods sold was increased by Baht 6,400 per
  ton. The main reason is on account of falling demand steel market
  which continuously effected from the global economy crisis.

  For the Period April 2007 - March 2008, net profit of the Company and
  subsidiaries was Baht 2,701.07 million, an increase of Baht 1,337.64
  million compared to Baht 1,364.63 million for April 2006 - March 2007.
  In the previous year, the Company had the accrued interest discount
  paid for refinance of Baht 272.87 million. However, when excluded the
  aforementioned item, net profit after tax shall increase by Baht
  1,637.30 million or by 122% over the previous year. Through various
  improvement initiatives in operation, the Company increased its
  production (243,000 tons compared to the year 2006 - 2007) while
  simultaneously contained cost of input material by improved commercial
  practices in the area of steel scrap sourcing (Baht 2,400 per ton in
  the year 2007 - 2008 over the year 2006 - 2007), resulting in the
  increase in sales volume by 316,000 tons and average selling price by
  Baht 3,400 per ton. Moreover, the interest expense decreased by Baht
  155.50 million which resulted from the refinance.

  For the period of January - March 2007, net profit of the Company and
  subsidiaries was Baht 392.02 million, representing a decrease of Baht
  42 million compared with previous quarter of Baht 434 million. The
  decrease was mainly due to the profit from accrued interest discount
  paid for refinance total Baht 273 million in the previous quarter.
  However, the increasing sale volume cause this quarter profit to be
  higher than last quarter which exclude profit from refinance.

Financial status

Assets

(1) Composition of assets

  As at March 31, 2009, the Company and its subsidiaries had total
  assets of Baht 25,027.90 million. It was composed of current assets,
  property, plant and equipment (net) and other asset of Baht 9,152.03
  million, Baht 11,129.26 million and Baht 4,746.61 million,
  respectively. Other assets included goodwill of Baht 4,116.34 million,
  deferred tax assets of Baht 318.84 million, Computer soft ware of baht
  219.40 million, deferred expenses and prepaid expenses Baht 91.53
  million, and others.

(2) Asset Quality

  As at March 31, 2009, the Company and its subsidiaries had trade
  accounts receivable net of allowance for doubtful accounts in the
  amount of Baht 508.87 million, 99.06% of which was from unrelated
  parties and 0.94% 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.

  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, 2009, the
  Company and its subsidiaries set aside a provision for doubtful
  accounts amounting to Baht 691.11 million, equivalent to 58% of total
  trade accounts receivable, all of which was against NTS’ trade
  accounts receivable accumulated prior to the merger.

  The Company and its subsidiaries, since year 1999, have made a
  provision for loss on revaluation in compliance with Accounting
  Standard No. 32 “Re: Property, Plant, and Equipment” and provision for
  impairment loss for building and machineries in accordance with
  Accounting Standard No. 36 “Re: Impairment”. As at March 31, 2009,
  such provisions were recorded at Baht 810.59 million and Baht 99.78
  million respectively. All of the aforementioned provisions were from
  NTS before its merger, with the purpose to reflect the fair market
  value of its assets based upon the recoverable amount. Accounting
  policy of the Company and its subsidiaries in respect of impairment of
  Property, Plant, and Equipment as well as intangible assets specifies
  that the review will be conducted upon an occurrence of incidents or
  changes in situation which may indicate lower book value of assets
  than their recoverable amount.

  In addition, as at March 31, 2009, the Company had set a provision for
  obsolescence and slow moving items in the amount of Baht 70.56
  million, which belonged to NTS prior to the merger amounting to Baht
  8.33 million, from previous year 36.77 and was from current
  establishment of Baht 29.95 million. This resulted from the upgrade of
  long shut down machineries, before the merger, that caused some spare
  parts impractical to use. 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.

  (3) Liquidity

  As at March 31, 2009, the Company and its subsidiaries had a net
  increase in cash and cash equivalents of Baht 553.53 million. The
  change was due to an increase in net cash from operating activities
  amounting to Baht 2,575.82 million, which was explained by the amount
  of operating profit before changes in operating assets and liabilities
  of Baht 1,156.75 million, and a decrease in changes in operating
  assets and liabilities of Baht 2,382.43 million largely due to
  reduction in trade accounts receivable ,increased in trade accounts
  payable, tax paid and interest paid of bath 963.36 million. With
  respect to investing activities, a net cash flow of Baht 2,707.11
  million was largely for additional investment in fixed assets while
  net cash of Baht 684.82 million was received for financing activities
  in respect of long–term loan draw down of baht 2,075.56million
  long-term loan repayment of bath 600.00 million and payment dividend
  of baht 640.04 million.

  As at March 31, 2008, the Company and its subsidiaries had a net
  increase in cash and cash equivalents of Baht 2,561.96 million. The
  change was due to an increase in net cash from operating activities
  amounting to Baht 3,918.70 million, which was explained by the amount
  of operating profit before changes in operating assets and liabilities
  of Baht 4,701.40 million, and a decrease in changes in operating
  assets and liabilities of Baht 782.69 million largely due to reduction
  in inventories and trade accounts payable. With respect to investing
  activities, a net cash flow of Baht 525.13 million was largely for
  additional investment in fixed assets while net cash of Baht 831.61
  million was used for financing activities in respect of long-term loan
  repayment and payment dividend.

  As at March 31, 2007, the Company and its subsidiaries had a decrease
  in cash and cash equivalents of Baht 44.45 million. The change was
  largely due to an increase in cash flow from operating activities
  amounting to Baht 300.18 million supported by operating profit before
  changes in operating assets and liabilities of Baht 807.09 million and
  a decrease in changes in operating assets and liabilities of Baht
  506.91 million mainly affected by a rise in trade accounts receivable
  and reduction in trade accounts payable. Net cash flow from investing
  activities was decreased by Baht 96.55 million which was largely due
  to an increase in fixed assets while net cash flow from financing
  activities was decreased by Baht 248.08 million as a result of
  long-term loan and short-term loan repayment to financial
  institutions.

  The Company’s current ratio was good, as evidenced by its 3.78 times,
  4.34 times and 2.98 times during the year 2006, the year ending March
  31, 2007,2008 and 2009 respectively. This was attributable to the
  positive cash flow from operation together with the decrease in
  short-term loan from repayment scheme.

  (4) Sources of Capital Fund

  Appropriateness of capital structure

  As at March 31, 2009, the Company and its subsidiaries’ debt to equity
  ratio of 0.55 times, showed a decline from 0.40 times in 2008.

  With regard to sufficiency of capital fund for business operation and
  future expansion, the Company has set a plan to maintain sufficient
  cash flow for such purposes.

  Shareholders’ equity

  As at March 31, 2009, the Company and its subsidiaries had
  shareholders’ equity of Baht 16,148.92 million consisting of the
  paid-up capital from ordinary shares and preferred shares totaling
  Baht 11,680.16 million, accounting for 72% of its shareholders’
  equity. The retained earnings was Baht 4,044.75 million and the legal
  reserve increased to Baht 283.10 million.

  Liabilities

  As at March 31, 2009, the Company and its subsidiaries had liabilities
  amounting to Baht 8,878.98 million consisting of current liabilities
  of Baht 3,066.69 million and Baht 5,812.29 million for non-current
  liabilities, representing 35% and 65% of total liabilities,
  respectively. Non-current liabilities included long-term loan from
  financial institutions of Baht 5,218.84 million, payable as a result
  of debt restructuring of Baht 186.90 million, long-term loan from
  related parties of Baht 270.60 million and other liabilities of Baht
  135.95 million.

  The Company and its subsidiaries has cancelled the existing credit
  loan for working capital and entered into the credit facility
  agreements with the new financial institution consist of six domestic
  institutions and another two foreign institutions. The credit limit
  total of Baht 2,430 million and Baht 670 million, respectively. The
  interest rate of credit facility were classified as following:
  overdrafts line of credit compute with Minimum Overdraft Rate (MOR)
  interest rate for overdraft, interest rate for Promissory Notes (P/N)
  was compute at Monthly Mean Rate (MMR) the same as those of the
  remaining working capital lines which included Trusts Receipt (T/R).

  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 3,100 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, 2009 the Interest Coverage Ratio was 1.42 times and
  Debt to Equity Ratio was 0.56 times.

  The collateral under long-term credit facilities with two commercial
  banks were NTS’s land, building, construction, machineries 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 1.2times and Debt to Equity Ratio was no
  higher than 1.5 times, respectively for each agreement, for the year
  ended March 31,2009 and 2008,the Company has withdrawn loans totaling
  baht 2,327 million and Baht 251 million, respectively.

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

  (5) 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, 2009, the Company had contingent liabilities as
  follows:

1.  Its subsidiaries had Letter of Credit (L/C) amounting to Baht 167
    million opened but were not under the liabilities’ condition.

2.  Its subsidiaries had obligations under the purchase and installation
    agreement of machineries totaling of Baht 1,260 million.

3.  The Company and its subsidiaries had obligations under lease
    agreements (including service fees) amounting to Baht 187 million,
    which can be classified by term as follows: within one year of Baht
    48 million, over one year up to five years of Baht 89 million, and
    over five years of Baht 50 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 factors in section 1 item 2 Re:
  Risk Factors, page 3-4 and in Notes to Financial Statements No. 29 Re:
  Financial Instruments.

13.3 Auditor remuneration

13.3.1 Audit Fee

  For the period April 2008 - March 2009, the Company and its
  subsidiaries paid audit fees to

-   Company’s auditor of Baht 4,000,000.

-   The audit firm affiliated with the auditor, individuals or business
    entities related to the auditor and its affiliated audit firm

  - None -

  13.3.2 Non-audit Fee

  For the period of April 2008- March 2009, the Company and its
  subsidiaries paid fee of Baht 1,937,516 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.