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  • Figure: the worlds biggest plant roof-mounted photovoltaic power generation facility built by Baosteel

  • ONE CHART TO UNDERSTAND THE ANNUAL REPORT

    BUSINESS RESULTS

    OPERATION HIGHLIGHTS

    2015 BUSINESS PLAN

    MARKET SHARE OF EACH PRODUCT

    EXPORT

    RESULTS Best in domestic industryTop 3 in global industry

    Ratio in mid- and large-sized steel enterprises total output

    Ratio in total profit

    TotalOperating Revenue

    Cold-Rolled Automotive Sheet

    Accomplished global debut of new products

    Photovoltaic power generation: 39.09 million kwh

    2013-2018 Green Manufacturing andDeveloping Plan released

    Built a green industry chain

    Won the recommendation of hazardous substance management system (QC080000) certification of British Standards Institution - an international authoritative certification organization

    The body structure of No. 1 blast furnacehas been capped and installation of ancillary facilities of the blast furnace has begun. Zhanjiang No.1 blast furnace is expected tobe ignited in September 2015.

    The construction of Baocloud IDC phase III project has started,which will be the biggest single-scale data center in China after completion

    Standard & Poors , Moodys and Fitch rated the company A-, A3 and A- respectively, the highest credit ratings in global iron and steel industry, all with stable outlooks

    E-COMMERCE DEVELOPMENT

    CREDIT RATINGS

    IT BUSINESS Operating revenue of E-commerce:

    RMB 15.1 billion Up 331% YoY, realizing an annual trade volume of 4.51 million tons

    Entered the stage of steel structure construction & installation and equipment installation.

    Million tons sales of newly developed product

    600 Ultra-supercritical Thermal Power Unit Steel Tube Innovative Development andApplication won the first prize of national science and technology progress award

    Development and Industrialization of High-grade Non-oriented Silicon Steel Manufacturing Technology won the first prize of Shanghai science and technology progress award

    Research and Development of Cold-rolled Hot-dip Aluminizing and Galvanizing Unit Core Technology and Outfit won the first prize of metallurgical science and technology progress award

    Most Admired Knowledge Enterprise in Asia for 3 consecutive years

    application ratio ofinvention patents hit all-time high

    The first-round trial production of new product models was completed successfully and brought to market

    STEEL:

    Tin-Coated Sheet Oriented Electric Steel

    Non-Standard Oil Pipes

    Total Profit Earnings Per ShareNet Assets Per Share

    America Europe and Africa

    Southeast Asia and South Asia

    East Asia and Australia

    Steel Product Export

    RMB 187.79 Billion

    RMB 8.28Billion

    0.35 Yuan/Share

    6.94 Yuan/ Share

    2.35 Million Tons

    Year-On-Year Increase

    346,000 Tons

    TECHNOLOGY INNOVATION

    ENVIRONMENT FRIENDLY

    ZHANJIANGPROJECT

    FRUITFUL ACHIEVEMENTS

    Steel output: 23.60 million tons Sales of steel products: 22.96 million tons

    Total operating revenue: RMB 194 billion Operating cost: RMB 175.7 billion

    Maintaining Top 3 worldwide with respect to profit per ton

    Note: CAPEX is short for Capital Expenditure, generally referring to investments in capital or fixed assets, intangible assets and deferred assets

    Sales of exclusive andleading products: 12 million tons

    CAPEX : RMB 24.7 billion Including RMB16 billionfor Zhanjiang Project

    CUSTOMERS FIRST CHOICE

    Zhanjiang

  • Important Notice

    (I) TheBoardofDirectorsand theBoardofSupervisorsofBaoshan Iron&SteelCo.,Ltd. (hereinaftertheCompany),alongwiththeirdirectors,supervisorsandseniorexecutives,herebyguaranteethattheAnnualReport is free fromfalsestatement,misleadinginformationorgravematerialomission,andassumerelevantseparateandjointresponsibilitiesinregardtothetruth,theaccuracyandtheintegrityofthecontentsoftheReport.

    (II) AllmembersoftheBoardofDirectorsoftheCompanyattendedtheboardmeeting.

    (III) DeloitteToucheTohmatsuCertifiedPublicAccountantsLLP(specialgeneralpartnership)gavestandardunqualifiedauditreportfortheCompany.

    (IV) ChenDerong,ChairmanoftheCompany,ZhuKebing,chiefaccountant,andWangJuan,DirectoroftheFinanceDepartmentinchargeoftheaccountingaffairs,attesttothetruthfulness,correctnessandcompletenessofthefinancialstatementsinthisReport.

    (V) ProposedProfitAppropriationPlanandCapitalizingofReversesPlanfortheReportingPeriodReviewedbytheBoardofDirectors

    AccordingtotheCompanyspolicythattheannualdividenddistributionshouldnotbelowerthan50%ofthenetprofitintheconsolidatedstatementsattributabletotheshareholdersoftheparentcompanyauditedinthecurrentyear,withthetotalcashdividendnotlessthanRMB2,896,174,530.45in2014.WhereastheCompanyalwaysattachesimportancetorewardingshareholdersandadherestothelong-termcashdividendspolicies,theCompanyintendstoallotthecashdividendatRMB0.18pershare(incl.tax).BasedontheCompanystotalshareattheendof2014,totalcashdividendtobedistributedwasRMB2,964,784,684.32(incl.tax),accountingfor51.2%ofthenetprofitintheconsolidatedstatementsattributabletotheshareholdersoftheparentcompany.

    (VI) RiskDisclosureonforward-lookingStatements

    TheproactivefutureplansanddevelopingstrategiesinthisReportdonotconstituteactualpromisestoinvestors.Investorsarekindlyremindedthatinvestmentinvolvesrisks.

    (VII) WascapitalfoundintheCompanytobeoccupiedbythecontrollingshareholderanditsrelatedparties?

    None

    (VIII)WasguaranteefoundintheCompanytobeprovidedinanymannerthatisagainstthestipulateddecision-makingprocedures?

    None

    Table of ContentsSection I Definitions and Major Risks Warning

    Section II Company Profile

    Section III Accounting and Financial Highlights

    Section IV Board of Directors Report

    Section V Significant Events

    Section VI Change of Shares and Shareholders

    Section VII Preferred Stock

    Section VIII Directors, Supervisors, Senior Executives and Employees

    Section IX Corporate Governance

    Section X Internal Control

    Section XI Financial Statements

    Section XII Documents Available for Reference

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    049

    153

  • Section I Definitions and Major Risks Warning

    2

    I. Definitions

    Abbreviation Specific Meaning

    EVI Early Vendor Involvement.

    Carbon steelAn alloy of iron and carbon. Generally speaking, its carbon content between 0.04% and 2%, while most of it less than 1.4%. Steel with no other alloy elements but iron, carbon, silicon, manganese, sulphur and phosphorus as well as silicon content no more than 0.4%, manganese no more than 0.8%.

    Non-oriented silicon steel

    Silicon steel with no rules or directions in crystal arrangement. Its silicon and aluminum content usually between 1.5% and 4.0%, low iron loss and magnetic induction, with nominal thickness of 0.35mm, 0.50mm etc. Used in various electrical machines, generators, household appliances, relays, electromagnetic switches and etc. for electric power industry.

    Oriented silicon steelSilicon steel with certain rules and directions in crystal arrangement. Silicon content usually about 3%, low iron loss and high magnetic induction, with nominal thickness of 0.20mm, 0.23mm, 0.27mm, 0.30mm, 0.35mm and etc. Used in various transformers and others aspects for electric power industry.

    Low temperature high magnetic induction oriented silicon steel

    Oriented silicon steel produced by low-temperature heating process.

    High-strength steelDivided by tensile strength, mild steel with tensile strength less than 340 MPa, high-strength steel with tensile strength between 340 MPa and 780 Mpa, ultra-high strength steel with tensile strength over 780 MPa.

    GA auto sheet Alloyed hot dip galvanized sheets.

    Heavy plate TMCP Heavy plate manufactured by thermal machine control process.

    Heavy plate DQ Heavy plate manufactured by direct quenching process.

    Deloitte Deloitte Touche Tohmatsu Certified Public Accountants LLP (special general partnership).

    II. Major risk warning

    With weak recovery in 2014, global economy will remain an increase of about 3 % in 2015, facing a low increase trend in a long following period.

    Chinas present economy has now entered the new normal economy. Based on the knowledge of the Companys internal and external environment

    in 2015, low concentration in China iron and steel industry, hard-to-change excessive competition, and the pressure brought by the implementation of

    the new environmental protection law on enterprises lack of environmental protection, the Company still needs to pay attention to the following in

    production and operation: Zhanjiang Project is a tough task, the Company has to ensure the engineering safety, quality and schedule so as to guarantee

    the realization of successful ignition in 159; there are still many challenges faced in the business transforming and upgrading from iron and steel

    to materials, from manufacture to service, from China to Global; as an urban-based steel company, Baosteel has to take an active role in exploring

    environmental protection management and clean production, environmental protection treatment and comprehensive utilization on solid, liquid and

    gas, as well as innovation of metallurgy manufacturability, for further co-melting and co-existence with city.

  • I. Company profile

    Chinese Name

    Chinese Abbreviation

    English Name Baoshan Iron & Steel Co., Ltd.

    English Abbreviati

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