The year 2011 marks the beginning of 12th Five-year Plan period as well as the start of Baosteel's new-round plan. In the context of profound changes in economic situations at home and abroad, the world steel industry has entered the era of meager profit where enterprises gain low profit at high cost. In face of volatile economic circumstances and increasingly intense market competition, all staff of Baosteel presses ahead with joint efforts and support of all stakeholders, to maintain the Corporation's leading position in the industry, with the annual total revenue amounting to RMB316.2 billion and the profit totaling RMB18.2 billion. Baosteel has been listed among the Fortune Global 500 for nine consecutive years, and ranked 197th in 2011. Recognized as one of the world's most admired companies, Baosteel won the second Chinese Industry Award and the sixth China Charity Award.

In the new era of meager profit, Baosteel puts forward the corporate vision "to become the leader of steel technology, the driver of green industry, the corporate model for common development of employees and enterprises". With such a vision, we present our thoughts and reflections on our value and responsibility, and are propelled to fulfill our responsibilities in day-to-day operation.In 2011,with regard to strategic deployment, Baosteel continued to implement the national industrial development program, steadily pushed forward strategic adjustment and gained initial success in this regard; in order to maintain its edge in technologies, Baosteel has established a national key laboratory on auto-use steel development and application, set up the Baosteel-Australia Joint R&D Center, and successfully put high-induction oriented silicon steel into use in major national projects. As for production and operation, Baosteel was committed to building an operation mechanism catering to customers by optimizing asset performance. In respect of environment management, we have issued Baosteel Green Declaration and Product Environment Declaration to promote energy conservation and emission reduction. As for human resources development, we adhered to the people-centered principle to help employees realize their ambition in the development of the Corporation, and formulated the medium- and long-term team building plans. In terms of management reform, we have practiced the tenure system for operators of the Corporation on a trial basis, in order to fully stimulate employees' passion for operation.

Towards 2012, the era of meager profit for the iron and steel industry is likely to carry on and the global economic downturn will continue to exert noticeable influence upon China's export-oriented iron & steel industry, as well as its downstream industries such as shipbuilding, home appliances manufacturing and machinery. As the economic growth pattern of the world changes, developed countries are reaching down while emerging economies are striving to catch up, and the manufacturing industry of China will face pressure coming from both sides. Meanwhile, with a slowdown of the demand growth, homogenous competition among iron and steel enterprises will be increasingly intense. Despite all the above, we'll keep to our belief that the ultimate value of an enterprise lies in its contributions to people's wellbeing and the fulfillment of its social responsibility. By firmly seizing the opportunity of industrial transformation and upgrading of national economy in the 12th Five-year Plan period and the opportunity of restructuring of the iron and steel industry, Baosteel will give full play to its advantages accumulated over the past 30-plus years in technology, management, service and brand building, unswervingly implement the strategy of quality product plus scale economy, pursue scientific development and seek to become the best and the most competitive, so as to better undertake our social responsibility.

Those bound to go far never rush, but keep a rapid speed. On the long path of creating value and undertaking responsibility, our pursuit knows no ends and our steps are as firm as ever.