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EREĞLİ IRON AND STEEL WORKS, INC.
1. Period of the Report
01/01/2008-31/12/2008
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
2. Title of the Association
EREĞLİ IRON AND STEEL WORKS, INC.
3. Members of the Board of Directors and Auditors
Page: 1
According to the Turkish Trade Act and related regulations, the elections of the Board of
Directors and Auditors are executed by the General Assembly within the framework of the
Articles of Association. The changes during the period are made by the decisions of Board of
Directors for members of Board of Directors, and by the Board of Auditors for members of the
Board of Auditors, as to be approved in the next regular general assembly. The company’s
2007 Regular General Assembly has been executed on 31.03.2008.
Members of the Board of Directors as of 31.12.2008:
Board of Directors Title Effective from
Şerif Coşkun ULUSOY Chairman (3 years) 27/02/2006
Mehmet Aydın
MÜDERRİSOĞLU
Deputy Chairman (3 years) 27/02/2006
Arzu Hatice ATİK Board Member (3 years) 26/02/2008
Celalettin ÇAĞLAR Board Member (2 years) 27/02/2006
Ergün Oktay OKUR Board Member (2 years) 27/02/2006
Ali Caner ÖNER Board Member (2 years) 27/02/2006
Dinç KIZILDEMİR Board Member (1 year) 27/02/2006
Ertuğrul AYDIN Board Member (1 year) 31/03/2008
Oğuz Nuri ÖZGEN Board Member (1 year) 17/07/2006
Changes in the Board of Directors within the Period
On 25.02.2008, Arzu Hatice ATİK was elected as a member of the Board of Directors, in
place of Gülefşan DEMİRBAŞ. On 31.03.2008, in the 2007 Regular General Assembly,
Ertuğrul AYDIN was elected as a member of the Board of Directors, in place of Halil Cem
KARAKAŞ.
Members of the Board of Auditors as of 31.12.2008:
Board of Auditors Title Effective from
Fatma CANLI Auditor (3 years) 22/03/2007
Ali Güner TEKİN Auditor (2 years) 31/03/2008

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Changes in the Board of Auditors within the Period
Page: 2
On 31.03.2008, in the 2007 Regular General Assembly, Ali Güner TEKİN, was elected as a
member of Board of Auditors for 2 years, in place of Dilek SADIKOĞLU.
Members of the Board of Directors’ and Auditors’ Authorities and Limits
The Chairman and the members of the Board of Directors and Auditors possess duties and
authorities set out in the Turkish Trade Act’s relevant legislations and the Articles of
Association.
4. Executive Management
Executive Management Title Effective from
Oğuz Nuri ÖZGEN President and Chief Executive Officer 13/07/2006
Esat GÜNDAY Executive Vice President (Operations) 13/07/2006
Ahmet Samim ŞAYLAN Executive Vice President
(Human Resources and Admin. Affairs)
13/07/2006
Halil Cem KARAKAŞ Executive Vice President
(Chief Financial Officer)
28/08/2007
Günhan BEŞE Executive Vice President
(Sales and Marketing)
13/07/2006
Ozan BEKÇİ Executive Vice President
13/07/2006
(Raw Materials and Procurement)
İsmail Hakkı GÜROL Executive Vice President
(Technical Services and Investment)
Changes in the Executive Management within the Period
None.
5. Compliance With The Corporate Governance Principles
13/07/2006
Corporate Governance Principles; published by Capital Markets Board and noted in 2008
Annual Activity Report were complied and applied also in between 01/01/2008 – 31/12/2008.
6. Amendments in The Articles of Association
The amendments made to the Articles of Association of Ereğli Iron and Steel Works Inc.
during the previous years have negatively affected the integrity of the language used therein.
Whilst efforts were dedicated to establish a language consistency, it has been considered that
simplifying the language of the Articles of Association would be beneficial for both our
partners and investors.
On the other hand, it has been observed that amendments made to the Articles of
Association in the course of time to comply with the changing legislation have interfered with
the orderly arrangement thereof. Therefore, it has been considered important to redraft the
Articles of Association in a systematic manner in line with the applicable legislation.

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 3
And also the increase in the number of legislative amendments in recent years has made it
mandatory to restructure the Articles of Association in a manner that would be more in
compliance with the Capital Markets legislation and other commercial regulations.
Nevertheless, on 27.04.2007, our Company’s registered capital of 700.000.000 TL was
exceeded in accordance with the concerning Capital Markets regulations and Capital Markets
Board’s authorization and our issued capital reached to 844.018.500 TL by own sources. So,
increasing the amount of the recorded capital ceiling of our Company to 5.000.000.000 TL by
making the Articles of Association Amendment at the first coming shareholders’ meeting
became compulsory.
Consequently, at the Shareholders’ Meeting held on 31.03.2008, our Company’s Articles of
Association has been amended and harmonized with both the applicable legislation and
Capital Markets Board’s decisions, the language used therein has been simplified and a
systematic structure has been restored and new article headings has been inserted.
7. The Nature and Amount of Issued Capital Market Instruments
None.
8. Significant Changes Occurring in the Environment the Company Operates in and
the Policies the Company Applies Against Those Changes
None.
9. Information on the Business Sector of the Enterprise
World has conserved its supply and demand force until September 2008. Increases in raw
material costs led to rise in steel prices, thus record high increases continued up to mid of
September. However, economic crises that break out from USA have extended globally. It
caused a monetary pressure on steel manufacturers and production cuts as well as negative
approaches throughout the markets. These have resulted in a reduction in steel demand.
Naturally, steel producers went for production cuts, which expanded stocks and caused
record-low decreases in prices. Having such incidents, world crude steel production remained
at 1.330 million tons which indicates a 1,1% decrease when compared to 2007.
Throughout 2008, China has preserved her foremost place in crude steel production by 502
million tons and manufactured 37,7% of world’s output. In 2008, Turkey has preserved her
eleventh place by 26,8 million tons with a crude steel production increment by 4,1%. Among
Turkey’s production of 26,8 million tons, 19,8 and 7 million tons were produced in electrical
arc furnaces and in integrated plants respectively.
10. Emphasis of the Enterprise within the Sector
In 2007, Erdemir Group has produced 5,37 million tons of crude steel. By doing so, it has
taken 57 th place globally and 17 th Europe-wide along with 8 th position within EU-27. In 2008,
there has been an increase of 11,3%, compared to 2007 with a crude steel production of 5,98
million tons. By the end of 2008, the crude steel production at Ereğli Plants has been around
2007 level; approximately 3.124 thousand tons. Regarding the crude steel production at

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 4
İskenderun Plants, the output has increased 27,4% compared to the 2007 and reached up to
2.851 thousand tons.
In the result of global financial crisis there has been a general downward spiral trend
respecting the real sector during the fourth quarter of 2008. In spite of declining conditions,
Erdemir has performed thriving outcomes in terms of management. This achievement is due
to Erdemir’s dynamic administrative approach and rapid reaction in the sense of
implementation. Such an attitude has immensely to do with accurate analyses of market
conditions as well as taking appropriate steps and opportune measures.
11. Research and Development Activities
Research and Development Activities within the period are as follows:
- The production and development of API 5CT K55 petroleum casing tube grade
(TÜBİTAK-TEYDEB Project)
- The production and development of dual phase steel grade (TÜBİTAK-TEYDEB
Project)
- The production of 100 mm. thick plates from 200 mm. slabs (TÜBİTAK-TEYDEB
Project)
- The production of steel grades having deep drawing and extra deep drawing
properties in hydrogen batch annealing process (TÜBİTAK-TEYDEB Project)
- The production of X-70 petroleum and natural gas pipe line steel grade in
reversible hot rolling mill process (TÜBİTAK-TEYDEB Project)
- The construction of Highly Efficient and Automation Controlled Normalizing
Furnace (TÜBİTAK-TEYDEB Project)
- The production and development of Gr50-60-70-80 steel grades according to
ASTM A 656 standard
- The production and development of alternative DC04 ED enameling steel grade
according to DIN EN 10209 standards, having improved aging properties
- The production and development of electric steel grades having high silicon
content
- The production and development of API X80 petroleum and natural gas pipe line
steel grade
- The development and production of steel grades S355JO, S355K2, S355J2W
(resistant to the atmospheric corrosion) produced in the concern of DIN EN 10025
standard due to the requirement of structural construction companies.
12. Investment Activities
Throughout 2008, investments of Erdemir Group have continued at its full speed. Blast
Furnace No.1 was put into commercial operation in May 30, at the Ereğli Plants. This
investment was an endeavor of pure Erdemir engineering. Additionally, Plate Sandblasting
and Painting Facility was put into commercial operation on February 14, 2008. Furthermore, in
the scope of Capacity Expansion Project of Erdemir Port, dock No. 3 of was put into
commercial operation on February 11, 2008.
Concerning the İskenderun Plants, the most remarkable investment of modernization and
transformation investments is the hot rolling mill. This mill is to provide the opportunity of

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 5
transition from long to flat products with an annual capacity of 3.500.000 tons. The first coil of
the mill was manufactured on August 2, 2008. The first slab in casting plant was manufactured
on February 14, 2008. Commercial operation dates of other investments are given below:
Mod. of Coke Oven Battery By-Products Plant (1st phase) February 22, 2008
Constructions of Coke Oven Batteries No. 5 and No. 6 March 1, 2008
Turbo Generator Modernization March 12, 2008
Burnt Lime Plant No. 8 March 24, 2008
Modernizations of Coal Prep. and Coke Manipulation Plants June 11, 2008
Harbor Investments (1st Phase) June 28, 2008
Air Separation Plant No. 7 July 7, 2008
Slab Reheating Furnaces No. 1 and No.2 July 29, 2008
380 kV E.T.L. and Switchgear Plant July 31, 2008
Steam Boilers No. 6 and No.7 October 17, 2008
Harbor Investments (Two Cargo Cranes) December 1, 2008
Modernization of Ore Preparation and Blending Facility December 1, 2008
Scrap Preparation Plant December 31, 2008
13. Government Grants
Government grants, received by Erdemir Group are as follows:
(TL)
01 January-
31 December 2008
01 January-
31 December 2007
Investment Allowance Grant 185.657.845 247.212.933
Energy Grant 3.674.055 3.418.138
Social Security Grant 476.810 472.535
Tax Grant 65.915 282.970
Research and Development Grant 31.026 -
Total 189.905.651 251.386.576
14. Business Expansion
The global economic crisis has affected flat steel consumers too. As a result of this effect,
Turkish flat steel consumption contracted approximately 11% in 2008 y-o-y. Despite this
contraction, it is estimated that consumption increase for the last 3 years is around 5% average
annually. With the ongoing effect of global economic crisis in 2009, contraction in Turkish flat
steel market is expected to continue, however with the effect of possible economic revival,
annual average 5% growth is expected to be reached in the next 3 years.
Despite growing Turkish flat steel market, Erdemir Group’s market share dropped to 28%
because Group’s capacity remained at a certain level till 2008. İskenderun Plants’
transformation project from long to flat products made a significant change and Hot Rolling Mill
has started commercial production with completion of implementation in the 4th quarter of
2008. As a result, with the effect of increasing total flat steel capacity, 40% target market share
levels are aimed in the upcoming years.

EREĞLİ IRON AND STEEL WORKS, INC.
15. Production Plants
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Main plants and capacities of Ereğli Iron and Steel Works Inc. are as follows:
01 January-31 December 2008
Capacity* Production C.U.P.
(tons) (tons) (%)
Coke Plant 1.039.000 998.130 96,1
Sinter Plant 2.000.000 1.918.555 95,9
Blast Furnaces** 3.000.000 2.793.788 93,1
Melt Shop** 3.200.000 3.219.025 100,6
Casters** 3.100.000 3.123.498 100,8
Hot Strip Mill.1 1.150.000 1.049.528 91,3
Hot Strip Mill.2 3.650.000 2.843.155 77,9
Plate Mill 500.000 204.244 40,8
Cold Mill.1 500.000 327.476 65,5
Cold Mill.2 1.500.000 1.191.649 79,4
Galvanizing Line 300.000 319.473 106,5
Electrolytic Tinning Line 250.000 247.332 98,9
General C.U.P % 90,3
Page: 6
* Annual capacity.
** Capacity improvement investment at Blast Furnaces is completed. It affects also melt shop
and casters capacity.
Main plants and capacities of İskenderun Iron and Steel Works Co. are as follows:
01 Jan.-31 December 2008
Capacity Production C.U.P.
(tons) (tons) (%)
Coke Plant* 2.346.980 2.016.778 85,9
Sinter Plant** 2.520.000 2.407.092 95,5
Blast Furnaces 3.800.000 2.846.304 74,9
Melt Shop 3.500.000 2.920.851 83,5
Billet Casting 2.500.000 1.980.777 79,2
Slab Casting 5.000.000 870.182 17,4
Hot Strip Mill*** 3.500.000 140.669 4,0
Wire Rod Mill 500.000 502.939 100,6
General C.U.P % 57,8
* Coke Plant: Total capacity of 2.346.980 tons (Met. Coke) /year in dry base
** Sinter: Total capacity of the plant is 2.520.000 tons skip sinter/year.
*** Hot Strip Mill: Hot strip mill has been erected and started in August 2008.

EREĞLİ IRON AND STEEL WORKS, INC.
16. Products
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Erdemir Isdemir Ermaden
Tinplate Billet Pellets
Galvanized Wire Rod - Rebar Iron Ore
Cold Rolled Pig Iron
Hot Rolled Slab
17. Productivity
Hot Rolled
Main plants and capacities of Ereğli Iron and Steel Works Inc. are as follows:
Page: 7
01 January-31 December 2008 01 January-31 Dec. 2007 01 January-31 Dec. 2006
Capacity* Production Capacity* Produc. Capacity* Produc.
(tons) (tons)
C.U.P.
(%) (tons) (tons)
C.U.P.
(%) (tons) (tons)
C.U.P.
(%)
Coke Plant 1.039.000 998.130 96,1 1.039.000 997.757 96,0 1.039.000 1.007.223 96,9
Sinter Plant 2.000.000 1.918.555 95,9 2.000.000 2.015.460 100,8 2.000.000 2.013.250 100,7
Blast Furnaces 3.000.000 2.793.788 93,1 2.700.000 2.774.107 102,7 2.700.000 2.820.621 104,5
Melt Shop 3.200.000 3.219.025 100,6 3.000.000 3.213.315 107,1 3.000.000 3.234.976 107,8
Casters 3.100.000 3.123.498 100,8 2.900.000 3.127.075 107,8 2.900.000 3.134.530 108,1
Hot Strip Mill.1 1.150.000 1.049.528 91,3 1.150.000 1.078.236 93,8 1.150.000 753.717 65,5
Hot Strip Mill.2 3.650.000 2.843.155 77,9 3.575.000 3.179.243 88,9 3.500.000 3.185.700 91,0
Plate Mill** 500.000 204.244 40,8 500.000 228.281 45,7
Cold Mill.1 500000 327.476 65,5 500.000 356.768 71,4 500.000 256.068 51,2
Cold Mill.2 1.500.000 1.191.649 79,4 1.500.000 1.340.675 89,4 1.500.000 1.482.773 98,9
Galvanizing Line 300.000 319.473 106,5 300.000 283.365 94,5 300.000 361.611 120,5
Elect. Tinning Line 250.000 247.332 98,9 250.000 233.644 93,5 250.000 161.540 64,6
General C.U.P % 90,3 97,0 97,7
* Annual capacity.
** Start up at September, 2006.
Main plants and capacities of İskenderun Iron and Steel Works Co. are as follows:
01 January-31 December 2008 01 January-31 Dec. 2007 01 January-31 Dec. 2006
Capacity* Production C.U.P. Capacity* Produc. C.U.P. Capacity* Produc. C.U.P.
(tons) (tons) (%) (tons) (tons) (%) (tons) (tons) (%)
Coke Plant* 2.346.980 2.016.778 85,9 1.740.000 1.412.502 81,2 1.740.000 1.298.140 74,6
Sinter Plant** 2.520.000 2.407.092 95,5 2.520.000 2.241.512 88,9 2.520.000 1.978.658 78,5
Blast Furnaces 3.800.000 2.846.304 74,9 3.600.000 2.473.788 68,7 2.450.000 2.120.115 86,5
Melt Shop 3.500.000 2.920.851 83,5 2.200.000 2.286.166 103,9 2.200.000 2.049.909 93,2
Billet Casting 2.500.000 1.980.777 79,2 2.500.000 1.685.510 67,4 2.500.000 2.001.748 80,1
Slab Casting 5.000.000 870.182 17,4 2.500.000 552.036 22,1 2.500.000 17.529 0,7
Hot Strip Mill*** 3.500.000 140.669 4,0
Wire Rod Mill 500.000 502.939 100,6 500.000 478.982 95,8 500.000 465.570 93,1
General C.U.P % 57,8 71,5 68,9

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
* Coke Plant: Total capacity of 2.346.980 tons (Met. Coke) /year in dry base
** Sinter: Total capacity of the plant is 2.520.000 tons skip sinter/year.
*** Hot Strip Mill: Hot strip mill has been erected and started in August 2008.
18. Production (quantity)
Final Products
(000 Tons)
01 Jan. -
31 Dec. 2008
01 Jan. -
31 Dec. 2007
01 Jan. -
31 Dec. 2006
Erdemir 4.041 4.206 3.903
Isdemir 2.910 2.469 2.118
Ermaden 1.740 1. 919 1.792
19. Sales Expansion
Page: 8
In 2008, depending on the raw material cost increases and strong demand, flat product prices
keep upwards approximately 70-100% on various product groups in different regions and
reached a record level in July 2008. Hence the economic crisis outbreak in USA and spreading
with an enormous influence on world economies, steel users face up to cash shortages,
production cuts and market tailspin caused contraction in steel demand. Under these
circumstances, flat product prices slipped away 45-70% from July 2008 to the end of the year.
As a result, to balance supply and demand, world steelmakers begun production cuts to slow
down price declines.
As the financial crisis introduce itself in domestic market, cash discount practice begun in July
in our company. At the beginning of August, blockage rate on the letter of guarantee was set to
10%, a decrease from 12%, and discounts from list prices were done to keep taking
precautions against crisis. In order to maintain our market share in contracted market, stock
sales were boosted in September and reached to a record level throughout the year. Customer
relationships have been emphasized to perceive customer satisfaction, monitor client
requirements closely and to respond in increasing retrogressive effect of crisis. Consequently,
551 planned visits to clients are done in total, in September-December period, to take orders
so as to keep production. Feedbacks are concerned within the market conditions and for the
contracted clients, that keep going to giving orders were given discounts. However, payment
shortage arose because of demand contraction and effect of financial crisis. In order to raise
cash flow, 15% discount on 17.09.2008 and 40% discount on 23.10.2008 to list prices were
applied. By the help of those sales policy changes, Erdemir’s competitive strength is
maintained.
Depending on contraction in flat steel demand, Erdemir’s sales in 2008 decreased 9% as
compared to 2007. On the other hand, export of Erdemir plant increased 18% as compared to
2007 and export sales share in whole sales raised from 15% to 20%.
In this period, our Group reviewed sales policies to respond customer demands quickly and
resiliently, continued investments with Advanced Planning and Scheduling System (APASS)
and Enterprise Resource Planning (ERP) projects and long-term and efficient relations with our
customers are maintained.

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 9
Erdemir Group completed the investment of hot rolling mill in İskenderun plant to correspond
the high demand of flat products in Turkey.
20. Sales (quantity)
Final Products
(000 Tons)
01 Jan. -
31 Dec. 2008
01 Jan. -
31 Dec. 2007
01 Jan. -
31 Dec. 2006
Erdemir 3.902 4.295 3.904
Isdemir 2.785 2.479 2.137
Ermaden 1.615 1.865 1.772
21. Indicators and Ratios
Financial Statements are prepared and audited in accordance with the CMB’s Communiqué
Serial:XI, No:29.
Selected Balance Sheet Items (TL)
(TL) 31/12/2008 31/12/2007
Current Assets 4.655.988.376 3.233.086.753
Non-current Assets 7.285.155.391 6.396.159.397
Total Assets 11.941.143.767 9.629.246.150
Current Liabilities 3.362.674.982 1.541.797.583
Non-current Liabilities 2.474.840.646 1.924.192.642
Shareholders’ Equity 6.103.628.139 6.163.255.925
Total Liabilities 11.941.143.767 9.629.246.150
Selected Income Statement Items (TL)
(TL) 31/12/2008 31/12/2007
Net Sales 6.808.694.806 5.356.861.465
Operating Profit 516.873.558 724.310.390
Profit for the Period 284.792.922 822.512.903
Net Profit for the Period* 227.693.594 704.225.737
Earnings Per Share 0,1841 0,5914
* Parent Company’s Interest is 211.474.460 TL in 2008. (2007: 679.425.900 TL)
Key Ratios
(%) 31/12/2008 31/12/2007
Operating Profit Margin 7,6 13,5
Net Profit Margin 3,3 13,1
EBITDA Margin 13,2 20,6
Debt/Equity Ratio 49/51 36/64

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
22. Collective Labor Agreement Applications and the Benefits
Page: 10
22 nd Period Collective Labor Agreement is signed on February 26 th , 2009 with Turkish Metal
Union and will be valid between 01.09.2008-31.08.2010.
In the scope of collective agreement applications, rights and benefits of the white collar and
blue collar workers were classified under social aids and leaves. Social aids; religious day
payment, heating allowance, annual leave allowance, marriage allowance, birth allowance,
death allowance in the case worker dies, death allowance in the case of decease of spouse,
children, parents, siblings, death allowance in the case decease is caused by work accident,
death allowance in the case member dies because of work accident (his/her legal successors
will receive), military service allowance, children allowance, educational allowance for each
child (primary school, secondary school, higher education ) and meal allowance. Leaves;
medical companionship leave, excuse leave, unpaid leave, marriage leave, leave in the case
of death of spouse, children, parents and siblings, birth leave and natural catastrophe leave.
Religious day payment, heating allowance and children allowance from the social aids are
given to both white collar and blue collar workers; the rest is paid only to the blue collar
workers. The leave section only includes the blue collar workers leaves’.
The number of the Group’s personnel based on categories at 31 December 2008:
31 December
2008
31 December
2007
Monthly paid personnel (A) 3.551 3.486
Hourly paid personnel (B) 9.063 9.603
Candidate worker (C) 1.797 1.378
Contractual personnel (D) 17 21
Contractual personnel (Contractor) 209 575
TOTAL 14.637 15.063
23. Shareholding and Capital Structure
Authorized Capital : TL 5.000.000.000
Paid-in Capital : TL 1.148.812.500
Shareholders Shares (TL) %
Ataer Holding A.Ş. 566.194.739 49,29
Other 547.222.231 47,63
Erdemir’s Own Shares 35.395.530 3,08
Total 1.148.812.500 100,00
24. Dividend Distribution Policy
The Company’s Dividend Distribution Policy in Regular General Assembly held on 31.03.2008:

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 11
“Our Company’s dividend distribution policy is covered by article XIII of the Articles of
Association. In compliance with current provisions and the relevant item of the Articles of
Association and as dictated by Corporate Governance Principles, a consistent balance is
sought between the interests of shareholders and the Company’s resource requirements in
determining the ratio of net profit that is to be distributed to shareholders in the form of cash
and/or bonus shares. In compliance with Corporate Governance Principles, the policy at issue
is given place in the annual activity report, also it’s being made public within the framework of
the disclosure policy by material disclosure.” described as such. After the Articles of
Association change accepted in Regular General Assembly, the judgment corresponding to
dividend distribution method is given place in 37 th topic.
25. The Improvement of Financial Sources and The Policies The Company Applies in
This Framework
Erdemir has full access to all national and international financial sources with its market
making force based on high trading volume in money markets. New funding alternatives which
are suitable for market conditions are continuously analyzed and advices are evaluated. Debt
policy of Erdemir is developed on capability of cash generation and strong capital structure.
Hedging methods and ratios used against financial risks in global crisis environment are
developed based on a frame of systematic model. Within risk tolerances forward, futures,
swap and options valid for market conditions are implemented if necessary. Sales price and
terms are improved against liquidity risk. Sales prices are re-regulated in parallel with
international prices and implementations increasing sales are developed.
26. Risk Management Policy
The regulation and also procedures related with management of market and customer risks are
issued in order to develop hedging methods, to measure the risks the Group exposed and keep
these risks within predetermined risk tolerances. A systematic model has started to be used in
order to monitor the methods which are being executed to save the resources and revenues of
Erdemir Group against losses of potential risks. Risks are measured permanently and the most
suitable hedging instruments are tried to be chosen in line with market conditions and Erdemir
Group’s policies.
Value at Risk method (VaR) is used to measure the market risk and the maximum loss
occurred from changes in interest rate, currency rate, and price is calculated periodically within
a definite probability ratio and definite time interval. If the calculated VaR passes predefined
limits, the most suitable hedging instrument is exercised.
For liquidity risk, another type of market risk, sufficient funds and loan reserve are tried to be
supplied by monitoring cash flows daily and matching the maturities of financial assets and
liabilities. Moreover, minimum cash position necessary for executing daily activities and access
permanency to credit suppliers are tried to be achieved. In addition to this, according to
developments in the market, hedging methods for interest rate are examined and preference
advices are made for the suitable ones.

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 12
Value at Risk calculations and probable hedging alternatives which are executed if the limits
are exceeded, are reported with a name of “Market Risk Report” weekly. This report aims to
give information about developments in economic environment, general market conditions and
riskiness with various economic indicators and indexes.
27. The Information About Affiliates Subject to Consolidation
The main scope of business and the participation ratios of the affiliates subject to consolidation
are stated as below:
Name of the Company Operation 2008 Share %
İskenderun Demir ve Çelik A.Ş. Iron and Steel 92,91
Erdemir Madencilik San. ve Tic. A.Ş. Iron Ore and Pellet 90,00
Erdemir Çelik Servis Merkezi San. ve Tic. A.Ş. Iron and Steel 100,00
Erenco Erdemir Müh. Yön. ve Dan. Hiz. A.Ş. Management and Consultancy 100,00
Erdemir Romania S.R.L. Iron and Steel 100,00
Erdemir Çelbor Çelik Çekme Boru San. ve Tic. A.Ş. Iron and Steel 100,00
Erdemir Lojistik A.Ş. Logistics Services 100,00
ArcelorMittal Ambalaj Çeliği San. ve Tic. A.Ş. (**) Steel for Packaging 25,00
(*) Financial statements of Erdemir Gaz San. ve Tic. A.Ş. is not consolidated as its effect on
accompanying consolidated financial statements is immaterial.
(**) Arcelor Mittal Ambalaj Çeliği San. ve Tic. A.Ş.’s financial statements are consolidated by
the equity pick-up method.
(***)Group’s participation ratio in Borçelik as of 31 December 2008 is 9,34%.
The consolidated financial statements incorporate the financial statements of the Group and its
subsidiaries controlled by the Group. Adjustments are made to eliminate intercompany sales
and purchases, intergroup receivables and payables and intergroup equity investments.
Entities in which the Group, directly or indirectly, has above 50% shareholding or interest of
voting rights or otherwise has power to exercise control over operations, are fully consolidated.
Control is achieved where the Group has the power to govern the financial and operating
policies of an investor enterprise so as to obtain benefits from its activities.
The accounting policies of the subsidiaries included in consolidation are changed and adopted
to the Group’s accounting policies where necessary. All significant transactions and balances
between the Company and its consolidated subsidiaries are eliminated for consolidation
purposes.
On acquisition, the assets and liabilities of the relevant subsidiaries are measured at their fair
values at the date of acquisition. The interest of minority shareholders is stated at the minority’s
proportion of the fair values of the assets and liabilities recognized. The results of subsidiaries
acquired or disposed of during the year are included in the consolidated income statement from
the effective date of acquisition or up to the effective date of disposal, as appropriate.

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
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Where necessary, adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other subsidiaries of the Group.
28. Organizations Out of Central Management
There are four regional sales offices of Erdemir, located in Ankara, İstanbul, Kdz. Ereğli and
İzmir.
29. Contributions
Contributions of Erdemir Group are as follows:
(TL)
01 January-
31 December 2008
01 January-
31 December 2007
Sports 1.585 -
Education 525.839 974.739
Government Entities 273.553 251.187
Health - 18.700
Arts 75.317 139.536
Charities 133.110 102.879
Foundations, Associations, Organizations, Institutes 396.635 188.854
Other 5.245 1.442
Total 1.411.284 1.677.337
30. Information for Shareholders
On 5 September 2008, talks on the 22 nd Labor Agreement started between Turkish Employers’
Association of Metal Industries, which Ereğli Demir ve Çelik Fabrikaları T.A.Ş. from Erdemir
Group is a member of and represents company during labor agreements, and Turkish Metal
Union. During the meetings, on 16 January 2009, strike was decided by Turkish Metal Union.
Consequently, the Turkish Employers’ Association of Metal Industries decided to lock out on 22
January 2009. It is announced by the Turkish Metal Union that the strike would be executed on
16 March 2009. Talks between both parties have resulted in an agreement on 26.02.2009. The
Labor Agreement is valid for two years, between 01.09.2008 and 31.08.2010. Previous strike
and lockout decisions have been terminated.
During the 4 th Labor Agreement between Erdemir Çelbor Çelik Çekme Boru San. Tic. A.Ş. and
Turkish Metal Union which started on 11 September 2008, strike was decided on 13 January
2009 to be executed on 13 March 2009 and announced on 17 February 2009. Subsequently on
19 February 2009, Erdemir Çelbor Çelik Çekme Boru San. Tic. A.Ş. decided for lock out on 21
January 2009 to be executed on 13 March 2009. Agreements between parties are continuing.
Effective from 1 January 2005, New Turkish Lira was defined as the new currency unit of the
Republic of Turkey, by omitting last six digits of Turkish Lira. Effective from 1 January 2009,
Council of Ministers legislated for the removal of the word “New” from the definition of the
currency unit. Consequently, the functional and reporting currency, the financial statements as

EREĞLİ IRON AND STEEL WORKS, INC.
BOARD OF DIRECTORS’ ANNUAL REPORT PREPARED IN
ACCORDANCE WITH THE COMMUNIQUÉ SERIAL:XI, NO:29
Page: 14
of December 31, 2008 and the comparative figures are presented in TL, with 1 TRY = 1 TL
ratio.