Tata Steel Thailand Public : Notes for Q4-2022

Tata Steel (Thailand) Public Company Limited

Notes to the Consolidated and Separate Financial Statements For the year ended 31 March 2022

General information

Tata Steel (Thailand) Public Company Limited ("the Company") is a public limited company which is incorporated and domiciled in Thailand and is listed on the Stock Exchange of Thailand since November 2002 with the objective to invest in other companies and provide management services. The address of the Company's registered office is as follows:

Rasa Tower 2, 20th Floor, 555 Phaholyothin Road, Chatuchak Sub-district, Chatuchak District, Bangkok 10900.

For reporting purposes, the Company and its subsidiaries are referred to as "the Group".

The principal business operation of the Group is manufacturing, rendering manufacturing services, distributing and trading of steel bars, wire rods and small section products.

The major shareholder is T S Global Holdings Pte. Ltd. ("TSGH"), which is incorporated in Singapore and holds 67.90% of the Company's shares, and is an affiliate of Tata Steel Limited, a listed company incorporated under the law of India.

The Company has not recorded an investment in Siam Steel Mill Services Company Limited which is held by Tata Steel Manufacturing (Thailand) Public Company Limited at 24% of share capital on an equity method because the Company has no significant influence to govern the financial and operating policies of and does not have any authorised director to sign on behalf of Siam Steel Mill Services Company Limited.

These consolidated and separate financial statements were authorized for issue by the Board of Directors on 20 April 2022.

15

Tata Steel (Thailand) Public Company Limited

Notes to the Consolidated and Separate Financial Statements For the year ended 31 March 2022

Significant events during the current period

Coronavirus Disease 2019 outbreak

The outbreak of Coronavirus Disease 2019 ("COVID-19") in early 2020 until 2021 has resulted in a global economic slowdown and adversely impacted most businesses and industries worldwide. However, there was no significant impact of the COVID-19 pandemic on the Group's operating results for the year ended 31 March 2022 and the Group's management assessed that the future operations, financial condition and liquidity are not expected to be materially impacted by it either. The full impact, however, of the COVID-19 pandemic will depend on its future developments of the disease control and prevention, such as its ultimate duration and scope of the pandemic including the government's measures on disease control and to ease economic impacts. The Group's management has implemented early precautions within its operations. It is continuously monitoring ongoing developments and assessing the financial impact.

3

Basis of preparation

The consolidated and separate financial statements have been prepared in accordance with Thai Financial Reporting Standards ("TFRS") and the financial reporting requirements under the Securities and Exchange Act.

The consolidated and separate financial statements have been prepared under the historical cost convention except as disclosed in accounting policies for certain financial assets (including derivative instrument) as described in Note 5.7 and certain financial liabilities as described in Notes 5.13.

The preparation of financial statements is in conformity with TFRS requires management to use certain critical accounting estimates and to exercise its judgement in applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas that are more likely to be materially adjusted due to changes in estimates and assumptions are disclosed in Note 8.

An English version of the consolidated and separate financial statements have been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail.

16

Tata Steel (Thailand) Public Company Limited

Notes to the Consolidated and Separate Financial Statements For the year ended 31 March 2022

New and amended financial reporting standards

4.1

New and amended financial reporting standards that are effective for accounting period beginning on or after 1 January 2021 and relate to the Group

• a) Revised Conceptual Framework for Financial Reporting added the following key principals and guidance:

  • - Measurement basis, including factors in considering difference measurement basis

  • - Presentation and disclosure, including classification of income and expenses in other comprehensive income

  • - Definition of a reporting entity, which maybe a legal entity, or a portion of an entity

  • - Derecognition of assets and liabilities

  The amendment also includes the revision to the definition of an asset and liability in the financial statements, and clarification to the prominence of stewardship in the objective of financial reporting.

• b) Amendment to TFRS 3, Business combinations amended the definition of a business which requires an acquisition to include an input and a substantive process that together significantly contribute to the ability to create outputs. The definition of the term 'outputs' is amended to focus on goods and services provided to customers and to exclude returns in the form of lower costs and other economic benefits.

• c) Amendment to TFRS 9, Financial instruments and TFRS 7, Financial instruments: disclosures amended to provide relief from applying specific hedge accounting requirements to the uncertainty arising from interest rate benchmark reform such as IBOR. The amendment also requires disclosure of hedging relationships directly affected by the uncertainty.

• d) Amendment to TAS 1, Presentation of financial statements and TAS 8, Accounting policies, changes in accounting estimates and errors amended to definition of materiality. The amendment allows for a consistent definition of materiality throughout the Thai Financial Reporting Standards and the Conceptual Framework for Financial Reporting. It also clarified when information is material and incorporates some of the guidance in TAS 1 about immaterial information.

• e) Amendment to TFRS 16, Leases amended to provide a practical expedient where lessees are exempted from having to consider individual lease contracts to determine whether rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications. It applies to rent concessions that reduce the lease payments due by 30 June 2022.

These financial reporting standards do not have the significant impact to the Group.

17

Tata Steel (Thailand) Public Company Limited

Notes to the Consolidated and Separate Financial Statements For the year ended 31 March 2022

4.2

New and amended financial reporting standards that are effective for accounting period beginning on or after 1 January 2022 and relate to the Group

Certain amended TFRSs have been issued that are not mandatory for the current reporting period and have not been early adopted by the Group.

a)

Interest rate benchmark (IBOR) reform - phase 2, amendments to TFRS 9, TFRS 7, TFRS 16 and TFRS 4, and accounting guidance, financial instruments and disclosures for insurance business provide relief measures addressing issues that might affect financial reporting during the reform, including the effects of changes to contractual cash flows or hedging relationship arising from the replacement of one benchmark with an alternative benchmark.

Key relief measures of the phase 2 amendments are as follows:

• • When changing the basis for determining contractual cash flows for financial assets and financial liabilities (including lease liabilities), changes that are necessary as a direct result of the IBOR reform and which are considered economically equivalent, will not result in an immediate gain or loss in the income statement. TFRS 16 has also been amended to require lessees to use a similar practical expedient when accounting for lease modifications that change the basis for determining future lease payments as a result of the IBOR reform.

• • Hedge accounting relief measures will allow most TFRS 9 hedge relationships that are directly affected by the IBOR reform to continue. However, additional ineffectiveness might need to be recorded.

TFRS 7 requires additional disclosure about:

• • the nature and extent of risks arising from the IBOR reform to which the entity is exposed to

• • how the entity manages those risks

• • the entity's progress in transitioning from the IBOR to alternative benchmark rates and how the entity is managing this transition.

The Group's management is currently assessing the impact of initial adoption of these amended standards.

18

Tata Steel (Thailand) Public Company Limited

Notes to the Consolidated and Separate Financial Statements For the year ended 31 March 2022

Accounting policies

• 5.1 Principles of consolidation

  • a) Subsidiaries

    Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group until the date that control ceases.

    In the separate financial statements, investments in subsidiaries are accounted for using cost. Cost also includes direct attributable costs of investment.

  • b) Intercompany transactions on consolidation

    Intra-group transactions, balances and unrealised gains on transactions are eliminated. Unrealised gains on transactions between the Group and its associates and joint ventures, if any are eliminated to the extent of the Group's interest in the associates and joint ventures. Unrealised losses are also eliminated in the same manner unless the transaction provides evidence of an impairment of the asset transferred.

• 5.2 Business combination

  The Group applies the acquisition method to account for business combinations with an exception on business combination under common control. The consideration transferred for the acquisition of a subsidiary comprises.

  • - fair value of the assets transferred,

  • - liabilities incurred to the former owners of the acquiree

  • - equity interests issued by the Group

  Identifiable assets and liabilities acquired and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

  On an acquisition-by-acquisition basis, the Group initially recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.

  The excess of the consideration transferred, the amount of any non-controlling interest recognised and the acquisition-date fair value of any previous equity interest in the acquiree (for business combination achieved in stages)

  over the fair value of the identifiable net assets acquired is recorded as goodwill. In the case of a bargain purchase, the difference is recognised directly in profit or loss.

19