SESIÓN 537, 24 DE JUNIO DE

The share capital of Klöckner & Co AG is set out in Section 4 para. (1) of the Arti- cles of Association of Klöckner & Co AG and currently (information valid as per 30 April 2008) amounts to EUR 116,250,000.00 (where reference is made in this re- port to the “Articles of Association of Klöckner & Co AG”, this means the Arti- cles of Association as amended on 20 June 2007). The share capital is divided into 46,500,000 no-par value shares. Each share participates in the share capital with EUR 2.50. The shares issued by Klöckner & Co AG are registered shares (Sec- tion 4 para. (4) of the Articles of Association of Klöckner & Co AG).

2.3.2 Authorised capital

Pursuant to Section 4 para. (2) lit. (a) of the Articles of Association of Klöck- ner & Co AG, the Management Board of Klöckner & Co AG is authorised to in- crease, with the approval of the Supervisory Board, the share capital until 20 June 2011 by issuing new no-par value registered shares against contributions in cash or in kind either once or several times by a total of up to EUR 50,000,000.00 in ac- cordance with the provisions in Section 4 para. (2) lit. (b) to (f) of the Articles of As- sociation of Klöckner & Co AG (Authorised Capital).

The Authorised Capital is divided into three tranches (“Tranches I to III”). Within the scope of the Authorised Capital, each of the Tranches I to III may be used up to the limit set out therein. The sum of all capital measures effected under Tranches I to III must not exceed the total amount of the Authorised Capital (Section 4 para. (2) lit. (e) of the Articles of Association of Klöckner & Co AG).

(i) Tranche I

Pursuant to Section 4 para. (2) lit. (b) of the Articles of Association of Klöckner & Co AG, the Authorised Capital may by used once or several times up to a total amount of EUR 50,000,000.00 by issuing new no-par value registered shares against cash contributions (Tranche I). Sharehold- ers must be granted a subscription right.

However, the Management Board may – with the approval of the Supervi- sory Board – exclude the subscription right of shareholders in order to avoid fractional amounts. The Management Board is furthermore author- ised to exclude the subscription right of shareholders with the approval of the Supervisory Board where this is necessary to grant subscription rights for new shares of the Company to holders of conversion or option rights created by the Company or affiliated companies of the Company, to the ex- tent they would be entitled to such rights after exercising their conversion of option rights. Finally, the Management Board is authorised to exclude the subscription right of shareholders with the approval of the Supervisory Board, to the extent that the percentage in the share capital of shares is- sued under exclusion of the subscription right in accordance with Sec- tion 186 para. 3 sentence 4 of the German Stock Corporation Act (Akti-

engesetz  AktG) does not exceed 10% of the share capital in total, and the issue price is not substantially below the exchange price of the shares of the Company already listed on the stock exchange.

(ii) Tranche II

Pursuant to Section 4 para. (2) lit. (c) of the Articles of Association of Klöck- ner & Co AG, the Authorised Capital may be used once or several times up to an amount of EUR 50,000,000.00 by issuing new no-par value registered shares against contributions in kind for the purpose of purchasing (also in- directly) companies, parts thereof or participations in companies (Tranche II). The subscription right of shareholders is excluded.

(iii) Tranche III

Pursuant to Section 4 para. (2) lit. (d) of the Articles of Association of Klöckner & Co AG, the Authorised Capital may be used once of several times up to an amount of EUR 50,000,000.00 by issuing new no-par value shares against cash contributions for the purpose of issuing new shares to employees of the Company or of affiliated companies of the Company (Tranche III). The subscription right of shareholders is excluded.

Pursuant to Section 4 para. (2) lit. (f) of the Articles of Association of Klöck- ner & Co AG, the Management Board is authorised to determine – with the ap- proval of the Supervisory Board – the further contents of the share rights, the fur- ther details of the share capital increase, its realisation and the conditions of the

share issue. The Supervisory Board is authorised to adjust the Articles of Associa- tion following the share capital increase, either in part or as a whole, by means of the Authorised Capital or after expiration of the authorisation period, in each case in accordance with the scope of the share capital increase effected by means of the Authorised Capital.

2.3.3 Conditional capital

Pursuant to Section 4 para. (3) of the Articles of Association, there is a contingent increase in the share capital of Klöckner & Co AG by up to EUR 11,625,000.00 due to the issue of 4,650,000 new no-par value registered shares, entitled to divi- dends as from the beginning of the business year in which they are issued.

The conditional capital serves the purpose of granting of shares in order to satisfy subscription and/or conversion rights of the holders of warrants and/or convertible bonds issued by the Company or a group company in accordance with the authori- sation given by the General Meeting of the Company on 20 June 2007. Moreover, the new shares will be issued at the respective option or conversion price, in each case to be determined in accordance with the resolution adopted by the General Meeting of the Company on 20 June 2007, agenda item no. 9.

The conditional capital increase will only be effected to the extent that the holders of subscription or conversion rights exercise such rights or that the holders having an obligation to convert fulfil such obligation as well as to the extent that no cash compensation is made and no own shares or shares issued under authorised capi- tal are used for satisfaction respectively. The Management Board is authorised to determine the further details regarding the realisation of a conditional capital in- crease (Conditional Capital 2007).

It is intended to propose to the General Meeting 2008 to create new conditional capital (Conditional Capital 2008). The Conditional Capital 2008 is meant to satisfy subscription rights for shares resulting from convertible bonds and/or warrants, which are issued on the basis of a corresponding authorisation by the General Meeting. It is intended to propose to the General Meeting 2008 to resolve upon the granting of such authorisation (agenda item 10; please refer to clause 6.1.5 of this Conversion Report for details on the Conditional Capital 2008).

2.3.4 Stock exchange trading and shareholder structure

The shares of Klöckner & Co AG were listed on the Frankfurt stock exchange for trading in the official market in June 2006, with the listing resulting in further obliga- tions (Prime Standard).

The shares of Klöckner & Co AG are also traded on the following stock exchange trading places: Stuttgart, Düsseldorf, Berlin, Munich, Hamburg and Hanover(?). The shares of Klöckner & Co AG were listed on the MDAX index of Deutsche Börse in late January 2007.

The shareholder structure of Klöckner & Co AG has substantially changed since the Company went public in 2006. The Company’s former majority shareholder Multi Metal Investment S.à.r.l. (“MMI”), an investment company of the private equity firm Lindsay Goldberg, sold the last shares still held by it in Klöckner & Co AG  such participation amounting to 15.5%  to mostly institutional investors in April 2007. Thus, the percentage of free float shares increased to 100%. Already in Oc-

tober 2006, the then majority shareholder MMI had sold 20% of the shares within the scope of a share offering, followed by the sale of further 30% of the shares in January 2007.

Thomson Financial conducted a survey in September 2007 and established that about 76% of our share capital is held by institutional investors. 11% of our share capital is held by private shareholders. The remaining percentage could not be clearly allocated by the survey. Of the institutional investors identified by the sur- vey, nearly 50% are US investors, followed by investors from Germany, Great Brit- ain and France. According to the mandatory notices (information valid as per 30 April 2008), Franklin Mutual Advisors, LLC, is the most important individual share- holder with 10.81%. Furthermore, TPG-Axon holds 5.38% and Fidelity International Limited holds 5.03%. Moreover, the share in the voting rights held by Franklin Mu- tual Series Fund amounts to 5.00%.

2.4 Constitution of the Company