II Basis of preparation

TSN is a private limited company incorporated in the Netherlands. The consolidated financial statements of the Group for the year ended 31 March 2026 comprise the Company and its subsidiaries and the Group’s interest in its joint venture and associated undertakings.

The consolidated accounts have been prepared in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union (‘EU’) and interpretations issued by the International Financial Reporting Interpretations Committee (‘IFRIC’). The functional and presentational currency of the Company is the Euro.

The financial statements have been prepared under the historical cost convention, unless otherwise stated.

The Group has prepared the financial statements under the IFRS accounting policies set out below and these policies have been applied consistently to all the periods.

Going concern

The TSN Group is mainly centred in the Netherlands but includes manufacturing assets elsewhere in mainland Europe (‘MLE’) and the United States, along with other international sales offices.

Assessment period and approach

In preparing the financial statements for the year ended 31 March 2026, the directors have assessed the Group’s ability to continue as a going concern. This assessment covers a period of at least 15 months from the date of approval of the financial statements and is supported by detailed liquidity forecasts extending to September 2027.

The forecasts are based on the approved FY2027 Annual Plan and include downside scenarios and sensitivity analyses reflecting reasonably possible adverse developments.

Trading environment and performance

The European steel market remained challenging, with weak manufacturing demand, high energy costs and elevated imports, influenced by global overcapacity and increasing geopolitical and trade uncertainty. Despite this environment, TSN’s financial performance improved in FY2026, with EBITDA of approximately €268 million (FY2025: €93 million), supported by operational improvements and transformation initiatives. These improvements are reflected in the Group’s forward‑looking forecasts.

Liquidity position

At 31 March 2026, TSN held cash of approximately €275  million (FY2025: €428 million) and had gross debt of approximately €241 million (FY2025: €491 million), following significant debt repayments during the year. The acquisition of LAG Velsen B.V. was fully funded from existing liquidity resources and did not materially affect liquidity headroom.

Financing facilities

TSN has access to a range of financing facilities to support its liquidity requirements. These include a committed revolving credit facility with a maximum limit of €550 million, maturing in May 2027, of which €440 million remained undrawn at the reporting date. TSN has received a support letter from Tata Steel Global Holding Pte Ltd (‘TSGH’), demonstrating its commitment to support TSN in the rollover of the existing RCF with existing / and or new banks for a period of at least 6 months beyond the current termination date.

In addition, the Group has access to non‑committed overdraft facilities of €115 million and participates in a committed non‑recourse trade receivables securitisation programme with a maximum capacity of €600 million. Together, these facilities provide sufficient liquidity headroom throughout the going concern assessment period.

Downside scenarios and sensitivities

The directors have considered a number of downside scenarios and sensitivities, including adverse movements in market spreads and volumes, as well as operational disruptions. These scenarios assume no mitigating management actions and reflect severe but plausible downside cases. Under these scenarios, the Group is expected to retain adequate liquidity and to meet its obligations as they fall due.

The assessment also reflects management’s consideration of a subsequent event relating to the temporary suspension of DSP operations in April 2026 due to chromium‑6 emission levels exceeding permit thresholds. A three‑month outage scenario has been assumed, with quantified impacts incorporated into the FY 2027 liquidity forecasts. As part of this assessment, the directors have also considered the ongoing discussions with the authorities regarding options for accelerated closure of Coke and Gas Plants (‘CGP’) 2 and CGP 1, while at the same time, ensuring that the CGP’s get closed in a controlled, safe and responsible manner.

The Environmental Agency has informed TSN that it is preparing a formal decision to revoke (part of) the environmental permit for CGP 1 and CGP 2. TSN is engaged in discussions with the relevant authorities to substantiate management's proposed timeline to ensure a safe, responsible and controlled closure process, also considering the cokes and gas plants form an integral part of TSN’s steelmaking activities. However, it is currently unknown when a decision will be issued by the competent authorities and what the contents of such a decision will be. Management assessed that it would need a certain period of time to close cokes and gas plants CGP 2 and CGP 1 in a safe and responsible manner while allowing continued operation of the related steel manufacturing activities. Should this timeline not be granted by the EA, this could result in an unsafe and/or irresponsible shutdown of the cokes and gas plants. An uncontrolled shutdown of one or both cokes and gas plants would have a material impact on the going concern of TSN.

Conclusion

After considering the Group’s forecasts of cash flows, duly stress tested with potential downside scenarios and the availability of sufficient liquidity, and the ongoing discussions with the relevant authorities on the proposed timeline to ensure a safe, responsible and controlled closure process of CGP2 and CGP1 and the legal remedies which TSN can resort to ensure mitigation against immediate closure actions of both the CGPs, the directors have concluded that it is appropriate to prepare the financial statements of TSN for the year ended March 31, 2026 on a going concern basis.

However, given the significance of the CGP facilities to TSN’s operations and the risks, challenges and uncertainties associated with the continued operations of both the CGP units, as per the approval date of the accounts, there exists a material uncertainty that may cast significant doubt on the entity’s ability to continue as a going concern.