Baosteel Co., Ltd. Held General Meeting of Shareholders 2006

On the morning of April 26th, the General Meeting of Shareholders 2006 of Bao Shan Iron & Steel Co., Ltd. was held in Shen Zhen, Guangdong Province. A part of directors, supervisors and senior managerial staff attended the meeting. Shareholders and authorized representatives attending the meeting accounts for 79.48% of the total people who have voting power of Baosteel Co., Ltd.

The Chairman of the Board of Baosteel Group Xu Lejiang, first of all in the capacity of the former Chairman of the Board of Baosteel Co., Ltd., extended his heartfelt gratitude in his address to all shareholders for their concern and support showed and rendered to Baosteel Co., Ltd. over a long period of time. He said since the founding and listing in the stock exchange of Baosteel Co., Ltd. in 2000, he and all shareholders attending the meeting had witnessed Baosteel Co., Ltd. growing up and becoming powerful. For seven years, the Board of Directors and management of Baosteel Co., Ltd. had overcome wild and periodical fluctuation in the trade while assets scale, sales revenue and gross profit of the company was still growing steadily. Looking into the future, Baosteel Co., Ltd. would shoulder more onerous task in the new round of development blueprint. As the Chairman of the Board of Baosteel Group, he would support Baosteel Co., Ltd. to grow further in the future as usual and believed that Baosteel Co., Ltd., under the leadership of the Chairman of Ai Baojun and the President of Fu Zhongzhe, would create more value and forge new prospects for shareholders.
Chaired by Ai Baojun, the Chairman of the Board of Directors of Baosteel Co., Ltd., the meeting examined and approved the financial final report 2006 of Baosteel Co., Ltd., the proposal of allocation of profits of 2006, the report of the Board of Directors and the Board of Supervisors in 2006, the report on remuneration of directors, supervisors and senior managerial staff in 2006 and the proposal of financial budget in 2007 and affiliated business daytoday. The meeting also examined and approved the proposal of continuing to engage Ernst & Yong Hua Ming as the independent accountant of the company in 2007, the proposal of selecting Fu Zhongzhe as a director and Zhou Guiquan as a supervisor of Baosteel Co., Ltd.

In 2006, facing M&A in the international steel industry and rapid catchup of the domestic steel fellows, by deepening integration and coordination, expediting 'the eleventh fiveyear' projects construction, implementing the strategy of differential products, widely carrying out costcut and increasing efficiency, Baosteel Co., Ltd. comprehensively fulfilled his operation target and task and sales volume, revenues and profits of the company hit a new high in the history. According to the operation status of the year and based on consideration of all factors such as value maximization, investment demand and financial cost, Baosteel Co., Ltd. has determined the profit allocation program for 2006. It is planned to distribute cash dividends over 6.1 billion RMB to all shareholders registered on the share registering date as specified in the dividend distribution bulletin, i.e. distributing cash dividend 3.5 Yuan RMB (pretax) per 10 shares.

The coming years is an important strategic opportunity for our national steel industry to boom, which is a turning point from a large steel complex to a powerful steel complex. Confronting the fierce competition both at home and abroad, how Baosteel Co., Ltd. will take the opportunity and cope with the challenge becomes a focus of a large number of investors. To this end, Ai Baojun said that the Board of Directors and the management would revolve round the new development strategy in the spirit of strict, earnest, hardworking and fulfilling the duty and acting in accordance with the philosophy of "good faith in operation", through adopting surpassingtype development strategy, focusing on competition strategy, sustaining to lift the comprehensive capability of the company, repay the large number of investors with sound operational performance and stable dividend distribution to build Baosteel Co., Ltd. into a most competitive steel complex in the world.