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16 December 2010 Thailand | Construction Material

Tata Steel (Thailand) SELL(downgraded)

SET | Reuters | Bloomberg

TSTH | TSTH.BK | TSTH TBCG Rating 2009

4 | Very GoodPrice (15 December 2010)

Bt1.67

Company Visit

Recovery is not in sight; downgrade to SELL12-month target price

Bt1.30 (-22.2%)

Sansanee Srijamjuree(66) 2633 6475sansanee@tisco.co.th

CONSOLIDATED FINANCIAL SUMMARYYear 2008 2009 2010 2011F 2012F 2013F

Sales (Bt, m) 31,139 29,353 22,422 26,701 30,800 33,000

EBITDA (Bt, m) 4,391 1,227 951 670 2,147 2,476

Net profit bef. extra (Bt, m) 2,715 169 -94 -570 741 974

Net profit bef. extra growth 105.1% -93.8% -155.7% n.a. n.a. 31.4%

Net profit (Bt, m) 2,701 81 -54 -570 741 974

Net profit growth 101.8% -97.0% -167.2% n.a. n.a. 31.4%

EPS bef. extra (Bt) - FD 0.32 0.02 -0.01 -0.07 0.09 0.12

EPS bef. extra growth 105.1% -93.8% -155.7% n.a. n.a. 31.4%

DPS (Bt) 0.08 0.00 0.00 0.00 0.02 0.03

PER (X) 5.7 74.1 -149.0 -24.7 19.0 14.4

PCF (X) 4.0 4.9 -2,334.3 -13.3 13.8 9.5

PBV (X) 0.9 0.8 0.9 0.9 0.9 0.8

EV/EBITDA (X) 4.1 12.9 19.5 30.0 9.1 7.6

Yield 4.1% 0.0% 0.0% 0.0% 1.3% 1.7%

ROE 17.5% 0.5% n.a. n.a. 4.7% 5.8%D/E ratio (X) 0.4 0.6 0.6 0.6 0.6 0.6

Note: use average price for historical PER, PBV, yield

Company Note

SHARE SUMMARY

Price:

52-week high Bt2.08

52-week low Bt1.58

52-week average Bt1.77

Stock data:

Issued shares: 8,168.8m

Par value: Bt1.0

Market capitalization: Bt14.2bn

Market capitalization: US$470.9m

Avg. Daily Turnover: Bt37.0m

Avg. Daily Turnover: US$1.2m

Foreign Limit: 100.0%

Foreign Ownership: 74.2%

Free Float: 30.0%

NVDR: 1.37%

Beta (3 years) 0.72X

TISCOs forecast vs. consensus

EPS (Bt) TISCO Consensus % Diff.

2010 (0.01) 0.04 (115.8)

2011F (0.07) 0.09 (176.9)

Major Shareholders (01/06/10)

Tata Steel Global Holdings Pte.Ltd 70.0%

Weeraphan Theepsuwan 3.9%

Thai NVDR Co 1.7%

Social Security Office 1.1%

American International Assurance

Company, Ltd-APEX 0.9%

PRICE / PRICE RELATIVE

0.0

0.5

1.0

1.5

2.0

2.5

Dec-08

Feb-09

Mar-09

May-09

Jul-09

Sep-09

Oct-09

Dec-09

Feb-10

Mar-10

May-10

Jul-10

Aug-10

Oct-10

Dec-10

Bt

Source: Reuters

Performance (%) -1m -3m -12m

TSTH 0.00 (10.70) (14.36)SET 1.63 11.99 45.91

Technical problem with furnace delays earnings recoveryWe have been Holders for TSTH for some time in expectation of an improvedperformance as production from its mini-blast furnace (MBF) is ramped up, butour latest meeting with the company indicates that this may take longer thanexpected. Hence, we expect TSTH to remain loss-making until at least4QFY11 (Jan-Mar 11). Accordingly we have downgraded our call to Sell.

Demand should improve in 4QFY11 but costs remains highTSTH disclosed its sales were badly hit by the floods in October, falling from a

monthly average of 0.1m tonnes to 89,000 tonnes. Although sales improved to0.11m tonnes in November and should rise further in 4QFY11 due to highseasonal demand, rising material cost and persistently high costs related to theMBF due to technical problems should continue to impact on earnings.

Margins to stay depressed until MBF output improvesWe expect the continuous rise in costs of iron ore, coke and scrap metal(quarterly contract prices for iron ore and coking coal should rise further by 5-7%), should eventually push steel prices up in 1Q11. However, TSTHsearnings will remain in the red until technical problems at the MBF have beensolved, enabling it to ramp up the utilization rate of its blast furnace. Allindications are that this is unlikely to occur in the near term.

Downgrade to SELL with a revised target price of Bt1.30We have cut our forecasts significantly to reflect the disappointing marginoutlook thus our TP derived from the residual income model (TP = BVS*(RoE-g)/(CoE-g)) for assumed FY2012F earnings, was slashed from Bt2.10 toBt1.30. Key risks include weakening in the domestic and global economiesresulting in lower than estimated demand and falling steel prices,mismanagement of inventories resulting in a narrowing of its metal spread andprolonged disruption of production at its MBF.

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Company Note TSTH

16 December 2010

2

Earnings improvement will not be seen untilproblems in operating the MBF are fixed

Mediocre sales in 3QFY11 but expect an improvement in 4QFY11 (Jan-Apr 11)TSTH revealed that sales were badly hit by floods in October, falling from a monthly

average of 0.1m tonnes to 89,000 tonnes. Also its sales were partly made up of exportswhich yield a very slim margin. However, demand recovered in November with salesrising to 0.11m tonnes and they should continue at this level in December. We expectTSTHs sales to improve further in 4QFY11 (Jan-Apr 11) due to high seasonal demand.The Iron and Steel Institute of Thailand (ISIT) has forecast demand for long steel productswill grow by 7% in 2011 compared with a 10% rise in 2010 (the difference is due mainly tothe low base for 2009). The main drivers of demand should be increased spending onpublic works and the construction of several mass transit projects next year i.e. the RedLine (Bangsue-Talingchan), Purple Line, Blue Line and Green Line. We expect this willlead to increased private sector investment, especially along the mass transit routes.

Cost-push demand factor should eventually lift steel pricesAnother problem for TSTH is narrowed metal spread as the cost of raw materials has

been on a continuous upward trend while its product prices have hardly risen. In 2QFY11its steel prices fell by Bt500/tonne, while costs rose by Bt1,100/tonne. This trend shouldcontinue into 3QFY11. While ongoing strength of the Thai baht should benefit TSTH bylowering its costs in baht terms for imported raw materials, the benefits from this are offsetby lower export revenue and stiffer competition with higher imports of wire rod from Chinadriving down selling prices. Steel mills are likely to face higher costs as the contract pricesfor iron ore and coking coal for 1Q11 look set to rise from current levels. For example, RioTinto the worlds leading iron ore miner will reportedly raise the new contract prices foriron ore in 1Q11 by 7.6%, while Vale is planning on a 5% price increase. Meanwhile, BHPBilliton and Japanese steelmakers have reached an agreement to increase the price ofcoking coke by 7% for 1Q11. The proposed price increases for both iron ore and cokingcoal should push up costs for mills and force them to raise prices for finished steelproducts. Supporting this view is the fact that Chinese and Taiwanese steel mills have

begun to announce price hikes for shipments in 1Q11. Nonetheless, we do not expectsteel price to rise sharply in 2011 given the moderate forecast for global steel demandgrowth of 5.3% in 2011 according to the World Steel Association (WSA).

Figure 1. Chinese steel prices Figure 2. Local steel rebar prices

Steel rebar 25mm

2,500

3,000

3,500

4,000

4,500

5,000

5,500

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

RMB/t

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

Jan-09

Mar-09

May-09

Jul-09

Sep-09

Nov-09

Jan-10

Mar-10

May-10

Jul-10

Sep-10

Nov-10

Bt/tonne

Source: Bloomberg Finance LP Sources: Ministry of Commerce, TISCO Research

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Company Note TSTH

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Figure 3. China spot iron ore import price Figure 4. China domestic coke price

40

60

80

100

120

140160

180

200

Nov-0

8

Jan-0

9

Mar-09

May-0

9

Jul-09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-10

May-1

0

Jul-10

Sep-1

0

Nov-1

0

US$/t

China import iron ore spot CFR

1,400

1,600

1,800

2,000

2,200

2,400

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

RMB/MT

China coking coal domestic spot Shanghai

Source: Bloomberg Finance LP Source: Bloomberg Finance LP

Figure 5. Actual & forecast world consumption of finished steel(tonnes, m) 2009 2010F 2011F % 09/08 % 10/09 % 11/10

Euro Union (27) 117.2 139.4 147.4 (35.7) 18.9 5.7

Other Europe 23.9 28.7 31.4 (17.3) 20.1 9.5

C.I.S. 35.8 45.3 50.3 (28.3) 26.5 11.1

N.A.F.T.A. 82.7 108.5 118.0 (36.2) 31.3 8.7

Central & S.America 34.1 43.6 47.6 (23.6) 28.2 9.1

Africa 26.6 28.0 30.0 9.7 5.1 7.1

Middle East 42.2 45.6 47.6 (7.5) 7.9 4.4

Asia & Ocenia 762.8 833.1 867.4 8.9 9.2 4.1

World 1,125.3 1,272.2 1,339.7 (6.6) 13.1 5.3

Developed Economies 291.3 358.8 375.3 (33.5) 23.2 4.6

Emerging & Developing Economies 834.1 913.4 964.4 8.7 9.5 5.6

China 542.4 578.7 599.0 24.8 6.7 3.5

BRIC 641.0 696.0 730.1 17.5 8.6 4.9

MENA 59.0 62.4 65.7 0.4 5.9 5.3

World excl. China 582.9 693.5 740.7 (24.4) 19.0 6.8

Source: World Steel Association (WSA)

But margins should stay depressed until the problems with MBF are solvedManagement admitted that technical problems at its MBF unit have yet to be fixed thusplant utilization is at a low rate and production costs remain high. TSTH initiated the MBFproject with the aim of lowering production costs and upgrading its product mix towardshigher-grade rebar. However, it has yet to achieve these goals and in fact managementrevealed that the production cost of rebar from the MBF is Bt1,500-Bt2,000/tonne higherthan that of Electric Arc Furnace (EAF). Nonetheless, management will keep the MBFrunning as it seeks ways of running the plant more efficiently. It faces a stark choice --unless technical problems with the MBF can be solved, TSTH will remain loss-making.

Downgrade to SELL with a revised target price of Bt1.30We have cut our forecasts substantially to reflect lower margin assumptions and thedisappointing performance so far of the MBF. Consequently our target price, derived fromthe residual income model (TP = BVS*(RoE-g)/(CoE-g)) and based on prospectiveearnings for FY2012F, was slashed from Bt2.10 to Bt1.30. Key risks include weakeningmomentum for the domestic and global economies resulting in lower than estimateddemand and steel prices, mismanagement of inventories which could put pressure on itsmetal spread, and prolonged disruption of production at its MBF.

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Company Note TSTH

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Figure 6. Earnings revisionsBt, m FY2011F FY2012F FY2013F

Old New % Chg. Old New % Chg. Old New % Chg.

Net profit before extra items 1,007 (570) (156.6) 1,999 741 (62.9) 2,171 974 (55.1)

Extra items 0 0 n.a. 0 0 n.a. 0 0 n.a.Net profit 1,007 (570) (156.6) 1,999 741 (62.9) 2,171 974 (55.1)

EPS (Bt) 0.12 (0.07) (156.6) 0.24 0.09 (62.9) 0.26 0.12 (55.1)

Change in major assumptions

Sales volume (tonne, m) 1,237 1,302 5.3 1,400 1,400 0.0 1,500 1,500 0.0Avg selling prices (US$/tonne) 630 662 5.1 636 751 18.2 636 758 19.3Scrap cost (US$/tonne) 330 370 12.1 315 420 33.3 315 420 33.3Metal spread (US$/tonne) 300 292 (2.7) 321 331 3.3 321 338 5.4Metal spread (Bt/tonne) 9,523 9,046 (5.0) 10,090 9,701 (3.9) 10,090 9,813 (2.8)Conversion cost (US$/tonne) 6,196 7,000 13.0 6,196 6,500 4.9 6,196 6,500 4.9Gross margin (%) 8.7 1.5 (82.6) 12.0 6.1 (49.1) 12.0 6.7 (44.3)Average FX rate (Bt/US$) 31.7 31.0 (2.4) 31.5 29.3 (6.9) 31.5 29.0 (7.8)

Sources: Company data, TISCO estimates

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Company Note TSTH

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CONSOLIDATED INCOME STATEMENT (Bt, m) CONSOLIDATED CASHFLOW STATEMENT (Bt, m)Year Ended March 31, Year Ended March 31,

2009 2010 2011F 2012F 2013F 2009 2010 2011F 2012F 2013F

Sales Income 29,353 22,422 26,701 30,800 33,000 Cash Flows from Operations (CFO)

Cost of Sales 28,257 21,715 26,297 28,925 30,799 Net Income 81 (54) (570) 741 974Gross Profit 1,095 707 404 1,875 2,201 Adjusting Items Not Affecting Cash

S&A Expenses 769 701 694 708 726 Depreciation and Amortization 811 886 906 926 947

Interest Expense 222 149 315 339 352 Unrealized FX Loss (Gain) 0 0 0 0 0

Net Result of Inv. in Asso. 0 0 0 0 0 Others 0 0 0 0 0

Other Incomes 90 59 54 54 54 + (-) in Working Capital 1,656 (837) (1,395) (650) (438)

Net Profit before Tax 195 (83) (551) 882 1,177 Net CFO 2,548 (6) (1,059) 1,018 1,483

Income Tax from Operations 27 13 13 148 212 Cash Flows from Investing Activities (CFI)

Net Profit before M.I. 168 (96) (565) 734 965 - (+) in Short-term Investment 0 0 0 0 0

Net (Profit) Loss of M.I. 2 2 (5) 7 9 - (+) in Investment in Affiliates 0 0 0 0 0

Net Profit before Extra. Items 169 (94) (570) 741 974 - (+) in Fixed Assets (2,704) (1,164) (500) (500) (500)

FX Gain (Loss) (Net of Tax) (88) 40 0 0 0 Net CFI (2,704) (1,164) (500) (500) (500)

Provision for inventory value 0 0 0 0 0 Cash Flows from Financing Activities (CFF)

Other gain (0) 0 0 0 0 + (-) in Debt Financing 1,353 112 (228) 0 (500)

Net Profit 81 (54) (570) 741 974 + (-) in Minority Interest (2) (2) 0 0 0

+ (-) in Share Capital and Premium 0 0 0 0 0

+ (-) in Warrant 0 0 0 0 0

Revenue Growth (%) (28.4) (8.9) (0.9) 2.0 2.5 + (-) in Equity Adjustment (2) 1 0 0 0

Gross Margin (%) 3.7 3.2 1.5 6.1 6.7 - Cash Dividend Paid (640) 0 0 0 (185)

Net Profit Margin (%) 0.3 (0.2) (2.1) 2.4 3.0 Net CFF 710 111 (228) 0 (685)

Net Profit Growth (%) (97.0) n.a. n.a. n.a. 31.4 Net Cash Increase (Decrease) 554 (1,059) (1,787) 518 298

CONSOLIDATED QUARTERLY RESULTS (Bt, m) CONSOLIDATED BALANCE SHEET (Bt, m)2Q10 3Q10 4Q10 1Q11 2Q11 As of March 31,

Sales Income 5,721 5,661 6,509 6,194 6,761 2009 2010 2011F 2012F 2013F

Cost of Sales 5,225 5,456 6,468 5,913 6,796 Current Assets 9,152 10,072 9,098 10,482 11,371

Gross Profit 496 205 40 281 (35) Current Liabilities 3,067 4,610 4,027 4,243 4,397

S&A Expenses 173 200 163 205 142 Total Assets 25,028 26,515 25,135 26,092 26,535

Interest Expense 42 32 38 64 81 Total Liabilities 8,879 10,421 9,611 9,827 9,481

Net Result of Inv. in Asso. 0 0 0 0 0 Minority Interest 10 8 8 8 8Other Incomes 28 19 3 21 4 Total Equity 16,139 16,086 15,516 16,257 17,046

Net Profit before Tax 309 (8) (158) 34 (253) Paid-up Capital 8,422 8,422 8,422 8,422 8,422

Income Tax from Operations 85 6 (26) 26 (91) Share Premium 3,259 3,259 3,259 3,259 3,259

Net Profit before M.I. 224 (15) (132) 8 (162) Warrant 130 130 130 130 130

Net (Profit) Loss of M.I. 0 0 1 0 1 Retained Earnings 4,328 4,273 3,703 4,445 5,233

Net Profit before Extra. Items 224 (14) (131) 9 (161) Equity Adjustment 1 2 2 2 2

FX Gain (Loss) (Net of Tax) 14 12 9 29 (47)

Provision for inventory value 0 0 0 (9) 0

Other gain 0 0 0 0 0

Net Profit 238 (3) (122) 28 (208)

2Q11

Revenue Growth (YoY %) (39.5) 22.2 59.4 40.4 20.0 Market Cap (Bt, m) 14,175

Gross Margin (%) 8.7 3.6 0.6 5.0 (0.6) Cash&cash equivalent (Bt, m) 718

Net Profit Margin (%) 4.2 (0.0) (1.9) 0.5 (3.4) Borrowings (Bt, m) 6,614

Net Profit Growth (YoY %) (84.3) n.a. n.a. n.a. n.a. Gearing (X) 0.4

KEY FINANCIAL RATIOS FORECAST ASSUMPTIONS2009 2010 2011F 2012F 2013F 2009 2010 2011F 2012F 2013F

Other Incomes to Total Revenue (%) 0.3 0.3 0.2 0.2 0.2 Hot Metal Capacity ('000 tonnes) 0 500 500 500 500

S&A to Sales (%) 2.6 3.1 2.6 2.3 2.2 Melting Capacity ('000 tonnes) 1,200 1,200 1,200 1,200 1,200

Current (Times) 3.0 2.2 2.3 2.5 2.6 Rolling Capacity ('000 tonnes) 1,700 2,000 2,000 2,000 2,000

Quick (Times) 1.3 0.8 0.5 0.6 0.7 Sales Volume ('000 tonnes) 1,112 1,198 1,302 1,400 1,500

A/R Turnover (Days) 18.0 11.3 12.5 12.1 12.6 Average selling prices (Bt/tonne) 26,414 18,656 20,507 22,000 22,000

Inventory Turnover (Days) 63.7 97.0 94.8 95.5 97.0 Scrap prices (Bt/tonne) 15,744 10,386 11,462 12,299 12,187

A/P Turnover (Days) 14.8 37.0 34.0 28.6 29.1 Metal spread (Bt/tonne) 10,670 8,269 9,046 9,701 9,813

Debt to Equity (Times) 0.6 0.6 0.6 0.6 0.6 Conversion Cost (Bt/tonne) 8,036 7,196 7,000 6,500 6,500

Net Debt to Equity (Times) 0.2 0.3 0.4 0.3 0.3 Avg. Cost of Debt (%) 3.8 2 .3 4.9 5.3 5 .8

Gearing (Times) 0.4 0.4 0.4 0.4 0.3 Avg. FX. Rate (Bt : US$1) 34.1 33.6 31.0 29.3 29.0

Interest Coverage (Times) 5.5 6.4 2.1 6.3 7.0

Return on Avg. Assets (%) 0.3 n.a. n.a. 2.9 3.7

Return on Avg. Equity (%) 0.5 n.a. n.a. 4.7 5.8

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Company Note TSTH

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Net profit PE Band

(1,000)

(500)

0

500

1,000

1,500

2,000

2,500

3,000

2005

2006

2007

2008

2009

2010

2011F

2012F

2013F

(150)

(100)

(50)

0

50

100

150

Profit (Bt, m) Net Profit Growth (%)

Bt, m %

0

1

2

3

4

5

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

58X 44X 30X 16X 2X

Bt

Sources : Company data, TISCO Research Sources : Company data, TISCO Research

ROAA, ROAE PBV Band

0

2

4

6

8

10

12

14

2005

2006

2007

2008

2009

2010

2011F

2012F

2013F

(4)

0

4

8

12

16

20

ROAA (LHS) ROAE (RHS)

% %

0

1

2

3

4

5

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

1.9X 1.5X 1.1X 0.7X 0.3X

Bt

Sources : Company data, TISCO Research Sources : Company data, TISCO Research

Profit margin EV/EBITDA Band

0

2

4

6

8

10

12

14

16

2005

2006

2007

2008

2009

2010

2011F

2012F

2013F

(4)

(2)

0

2

4

6

8

10

Gross Margin (LHS) Net Profit Margin (RHS)

% %

0

1

2

3

4

5

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

22X 17X 12X 7X 2X

Bt

Sources : Company data, TISCO Research Sources : Company data, TISCO Research

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Company Note TSTH

16 December 2010

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TISCO Securities Company Limitedwww.tiscosec.com

Bangkok

48/8 TISCO Tower 4th Floor, North Sathorn Road, Bangkok 10500, Thailand

Tel : 662 633 6999 Fax : 662 633 6490, 662 633 6660

Esplanade Branch

99 Esplanade Shopping Center, Room 202-2, 2nd Floor, Ratchadapisek Road, Din Daeng, Bangkok 10400

Tel : 662 641 3251, 662 641 3252 Fax : 662 641 3253

Chiang Mai

275/4, 2nd Floor, Chang Phuak Road, Chang Phuak, Muang District, Chiang Mai 50300

Tel. 0 5322 4722 Fax. 0 5322 4711

Nakhon Pathom

386, 388 Petchkasem Road, Prapatone, Muang District, Nakhon Pathom 73000Tel: 0 3421 1812 Fax: 0 3425 1676

Nakhon Ratchasima

Tesco Lotus Korat, 719/5 Mittraphap Road, Naimuang, Muang District, Nakhon Ratchasima 30000

Tel: 0 4425 7752 Fax: 0 4425 3752

Udon Thani

227/21 2nd Floor, Udondussadee Road, Muang District, Udon Thani 41000

Tel: 0 4224 6888 Fax: 0 4224 5793

Score Range Level Description

90 - 100 5 Excellent

80 - 89 4 Very Good

70 - 79 3 Good

Corporate Governance Report 60 - 69 2 Satisfactory

of Thai Listed Companies 2009 50 - 59 1 Pass

< 50 or not rated n.a. n.a.

Disclaimer

The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the policy ofthe Office of lthe Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange ofThailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, isfrom the perspective of a third party. It is not an evaluation of operation and is not based on inside information. (In order to recognize well performedcompanies, companies classified into the three highest score groups (Good, Very Good, and Excellent) will be announced to the public).

The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may bechanged after that date. TISCO Securities Company Limited does not confirm nor certify the accuracy of such survey result.

The information, statements, forecasts and projections contained herein, including any expression of opinion, are based upon sources believed to be reliable but their accuracycompleteness or correctness are not guaranteed. Expressions of opinion herein were arrived at after due and careful consideration and they were based upon the best informationthen known to us, and in our opinion are fair and reasonable in the circumstances prevailing at the time. Expressions of opinion contained herein are subject to change withoutnotice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. TISCO and other companies in the TISCO Groupand/or their officers, directors and employees may have positions and may affect transactions in securities of companies mentioned herein and may also perform or seek to perform

investment banking services for these companies. No person is authorized to give any information or to make any representation not contained in this document and any informationor representation not contained in this document must not be relied upon as having been authorized by or on behalf of TISCO. This document is for private circulation only and isnot for publication in the press or elsewhere. TISCO accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or its content. The useof any information, statements forecasts and projections contained herein shall be at the sole discretion and risk of the user.

Important Notice : This Document may only be issued or passed on to any person in the United Kingdom if that person is of a kind described in Article 11 of the Financial Services1986 (Investment advertisements) Exemptions Order 1996 or otherwise pursuant to exemptions to Section 57 of the Financial Services Act 1986. In addition, no person who is anAuthorised Person may issue or pass on this Document, or otherwise promote the Company, to any person in the United Kingdom other than under the rules of self-regulatoryorganisations or the Financial Services Authority applicable to such Authorised Persons. This Document is confidential and is intended solely for the use of its recipient. Anyduplication or redistribution of this Document is prohibited.