Angang Steel Company Limited announced that on January 3, 2014, the company has entered into the Capital Contribution Agreement with Pangang Xichang pursuant to which the parties have agreed to establish Pangang Chongqing with a registered capital of RMB 100 million. Upon completion of the transaction under the Capital Contribution Agreement, Pangang Chongqing will be owned as to 50% by each of the company and Pangang Xichang, respectively. Angang Group Company indirectly holds, through Angang Holding, an approximate 67.67% equity interest in the company and hence, is the ultimate controlling shareholder of the company and a connected person of the company as defined under the listing rules.

As the ultimate subsidiary of Angang Group company, Pangang Xichang is a connected person of the company as defined under the Listing Rules. As such, the transaction contemplated under the Capital Contribution Agreement constitutes connected transaction of the company.