FORM 6 - K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

TENARIS, S.A.

(Translation of Registrant’s name into English)

TENARIS, S.A.
46a, Avenue John F. Kennedy
L-1855 Luxembourg
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or 40-F.

Form 20-F þ      Form 40-F

     Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12G3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b): 82-   .

 

 

The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended. This report contains Tenaris’ notice of Annual General Meeting and Extraordinary General Meeting of Shareholders and the Shareholder Meeting Brochure and Proxy Statement.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 24, 2006

Tenaris, S.A.

By: /s/ Cecilia Bilesio
Cecilia Bilesio
Corporate Secretary

Dear Tenaris Shareholder,

I am pleased to invite you to attend the Annual General Meeting and Extraordinary General Meeting of Shareholders of Tenaris Société Anonyme Holding. Both meetings will be held on Wednesday, June 7, 2006, at 46A, Avenue John F. Kennedy L-1855 Luxembourg. The Annual General Meeting of Shareholders will begin promptly at 11:00 a.m., (Central European Time), while the Extraordinary General Meeting of Shareholders will be held immediately upon conclusion of the Annual General Meeting of Shareholders.

At the Annual General Meeting of Shareholders, you will hear a report on the Company’s business, financial condition and results of operations, and have the chance to meet the Chairman and Chief Executive Officer. Subsequently, the Extraordinary General Meeting of Shareholders will decide on proposed amendments to Tenaris’s articles of association.

Enclosed please find the Notice and Agenda for both meetings and the Shareholder Meeting Brochure and Proxy Statement. These documents, as well as the Company’s 2005 annual report (which includes the Company’s financial statements for the year ended December 31, 2005 in their consolidated and unconsolidated form together with the board of director’s report and the report of the independent auditor), are available on our website at www.tenaris.com/investors and may also be obtained upon request at 1 800 990 1135 (if you are in the United States) or 201 680 6630 (if you are outside the United States) and are available free of charge at the Company’s registered office in Luxembourg.

Even if you only own a few shares or ADRs, I would like to see them represented at both meetings. You can vote your shares personally or by proxy. If you choose to vote by proxy, you may use the enclosed dedicated proxy form. If you are a holder of ADRs, please see the letter from JP Morgan Chase, the depositary bank, for instructions on how to exercise your vote by proxy.

I look forward to welcoming you on June 7, 2006.

Very truly yours

Paolo Rocca
Chairman and Chief Executive Officer

April 20, 2006

JPMORGAN CHASE BANK, N.A.
4 New York Plaza, Floor 13
New York, NY 10004

Re: TENARIS S.A.

To:		Registered Holders of American Depositary Receipts (“ADRs”) for Shares of Common Stock, US$1 Par Value (“Common Stock”), of Tenaris S.A. (the “Company”):

The Company has announced that its Annual General Meeting of Shareholders will be held on June 7, 2006, at 11:00 a.m. (Central European Time), and that an Extraordinary General Meeting will be held immediately after conclusion of the Annual General Meeting. Both meetings will take place at 46A, Avenue John F. Kennedy L-1855 Luxembourg. A copy of the Company’s Notice of Annual General Meeting and Extraordinary General Meeting of Shareholders, including the agenda for such meetings, is enclosed.

The enclosed materials are provided to allow the shares represented by your ADRs to be voted at the meetings. They include the Notice of Annual General Meeting and Extraordinary General Meeting of Shareholders and the Shareholder Meeting Brochure and Proxy Statement. These documents, as well as the Company’s 2005 annual report (which includes the Company’s financial statements for the year ended December 31, 2005 in their consolidated and unconsolidated form), are available on our website at www.tenaris.com/investors and may also be obtained upon request at 1 800 990 1135 (if you are in the United States) or 201 680 6630 (if you are outside the United States).

Each holder of ADRs as of April 25, 2006, which continues to hold such ADRs on May 23, 2006, is entitled to instruct JPMorgan Chase Bank, N.A., as Depositary (the “Depositary”), as to the exercise of the voting rights pertaining to the Company’s shares of Common Stock represented by such holder’s ADRs. Although voting instructions and proxy material are sent to holders as of April 25, 2006, only those Holders of record as of each of April 25, 2006 and May 23, 2006 will be entitled to provide the Depositary with voting instructions. Notwithstanding that holders of ADRs must have held ADRs on each such date, in order to avoid the possibility of double vote, only those positions on May 23, 2006 will be counted for voting instruction purposes. Eligible ADR holders who desire to have their shares represented by their ADRs voted at the Meeting must complete, date and sign a proxy form and return it to JPMorgan Chase Bank, N.A., P.O. Box 3500, South Hakensack, NJ 07606-3500, U.S.A. If the Depositary receives properly completed instructions by 3:30 p.m., New York City time, on May 31, 2006, then it shall vote or cause to be voted the shares underlying such ADRs in the manner prescribed by the instructions. However, if by 3:30 p.m., New York time, on May 31, 2006, the Depositary receives no instructions from the holder of ADRs, or the instructions are not in proper form, then the Depositary shall deem such holder to have instructed the Depositary to vote the underlying shares of Common Stock of any such ADRs in favor of any proposals or recommendations of the Company, for which purposes the Depositary shall issue a discretionary proxy to a person appointed by the Company to vote such shares in favor of any proposals or recommendations of the Company (including any recommendation by the Company to vote such shares on any given issue in accordance with the majority shareholder vote on that issue). No instruction shall be deemed given and no discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary it does not wish such proxy given or if the proposal has, in the discretion of the Depositary, a materially adverse effect on the rights of the holders of ADRs.

Any holder of ADRs is entitled to revoke any instructions which it has previously given to the Depositary by filing with the Depositary a written revocation or duly executed instructions bearing a later date at any time prior to 3:30 p.m., New York time, on May 31, 2006. No instructions, revocations or revisions thereof shall be accepted by the Depositary after that time.

IF YOU WANT YOUR VOTE TO BE COUNTED, THE DEPOSITARY MUST RECEIVE YOUR VOTING INSTRUCTIONS
PRIOR TO 3:30 P.M. (NEW YORK CITY TIME) ON MAY 31, 2006.

Depositary                          

April 20, 2006
New York, New York

Tenaris S.A.
Société Anonyme Holding
46A, Avenue John F. Kennedy
L-1855, Luxembourg
RCS Luxembourg B 85 203

Notice of the Annual General Meeting and Extraordinary General Meeting of Shareholders to be held on June 7, 2006

Notice is hereby given to holders of shares of common stock of Tenaris S.A. (the “Company”) that the Annual General Meeting of Shareholders will be held on June 7, 2006, at 11:00 a.m. (Central European Time), and that an Extraordinary General Meeting will be held immediately after conclusion of the Annual General Meeting. Both meetings will be held at 46A, avenue John F. Kennedy L-1855 Luxembourg. In the Annual General Meeting, shareholders will vote with respect to the items listed below under the heading “Annual General Meeting”. At the Extraordinary General Meeting, shareholders will vote with respect to the item listed below under the heading “Extraordinary General Meeting”.

Item 1.

AGENDA

Annual General Meeting

1.		Consideration of the Board of Directors’ and independent auditor’s reports on the consolidated financial statements. Approval of the Company’s consolidated financial statements as of, and for the fiscal year ended, December 31, 2005.
2.		Consideration of the Board of Directors’ and independent auditor’s reports on the unconsolidated annual accounts. Approval of the Company’s unconsolidated annual accounts as of, and for the fiscal year ended, December 31, 2005.
3.		Allocation of results and approval of dividend payment.
4.		Discharge to the members of the Board of Directors.
5.		Election of the Board of Directors’ members.
6.		Authorization to the Board of Directors to delegate the day-to-day management of the Company’s business and the power to represent the Company as “administrateur délégué” (chief executive officer) to Mr. Paolo Rocca (with full power of sub-delegation).
7.		Authorization to the Board of Directors to appoint any or all of its members as the Company’s attorneys-in-fact including in general day to day management of the Company.
8.		Authorization to the Board of Directors to cause the distribution of all shareholder communications, including its shareholder meeting and proxy materials and annual reports to shareholders by such electronic means as are permitted by any applicable laws or regulations.
9.		Board of Directors’ compensation.
10.		Appointment of independent auditors and approval of their fees.

Pursuant to the Company’s Articles of Association, resolutions at the Annual General Meeting of Shareholders will be passed by simple majority vote, irrespective of the number of shares present or represented

Extraordinary General Meeting

1.

Amendment of article 11 of the Articles of Association to require the Audit Committee to report to the board of directors on its activity and on the adequacy of the internal control system once a year.

Pursuant to the Company’s Articles of Association, an extraordinary general meeting of shareholders convened to consider a proposed amendment to the Company’s Articles of Association can only validly vote on such amendment on the first call if at least half of the share capital is present or represented. If the required quorum is not met, a second meeting may be convened by means of notices published twice, at twenty (20) days interval at least and in any case twenty (20) days before the meeting, in the Mémorial C, Recueil des Sociétés et Associations (Luxembourg Official Gazette) and such other newspapers as provided for in article 19 of the Articles of Association of the Company. The second meeting can validly decide regardless of the quorum present or represented. In each case, resolutions may only be passed by a two-thirds majority of the votes of the shareholders present or represented.

PROCEDURES FOR ATTENDING THE MEETINGS

Holders of shares wishing to attend the meetings must obtain an admission ticket by depositing their certificates representing their common stock, not later than 4:00 p.m. (local time) on June 1st, 2006, at any of the following Company’s offices:

Luxembourg:		46A, Avenue John F. Kennedy
		L-1855 Luxembourg
Argentina:		Leandro N. Alem 1067, 15°
		(C1001AAF) Buenos Aires
		Attn: Horacio de las Carreras and/or Eleonora Cimino
Italy:		c/o Dalmine S.p.A.
		Piazza Caduti 6 luglio 1944 n. 1 24044
		Dalmine (BG)
		Attn: Marco Tajana and/or Teresa Gaini
Mexico:		c/o Tubos de Acero de México S.A.
		Campos Eliseos 400-17
		Col. Chapultepec Polanco
		11560 Mexico D.F.
		Attn: Félix Todd and/or Luis Armando Leviaguirre

Holders of shares through fungible securities accounts wishing to attend the meetings must present a certificate (issued by the financial institution or professional depositary holding such shares) evidencing such deposit and certifying the number of shares recorded in the relevant account as of June 1st, 2006. Such certificate must be filed no later than 4:00 p.m. (local time) on June 1st, 2006 with any of the Company’s offices indicated above and, in the case of shares held in Mexico, with S.D. Indeval, S.A. de C.V. (Paseo de la Reforma #255, 2o. y 3er. piso Col. Cuauhtémoc, Mexico City).

Holder of shares as of June 1st, 2006 may also vote by proxy. To vote by proxy, holders must file the required certificate and a completed proxy form not later than 4:00 p.m. (local time) on June 1st, 2006 with any of the Company’s offices indicated above or, in the case of shares held in Mexico, with S.D. Indeval, S.A. de C.V, in Mexico City.

Holders of American Depositary Receipts (the “ADRs”) as of April 25, 2006, which continue to hold such ADRs on May 23, 2006, are entitled to instruct JPMorgan Chase Bank, N.A., as Depositary (the “Depositary”), as to the exercise of the voting rights pertaining to the Company’s shares of Common Stock represented by such holder’s ADRs. Although voting instructions and proxy material are sent to holders as of April 25, 2006, only those holders of ADRs as of each of April 25, 2006 and May 23, 2006 will be entitled to provide the Depositary with voting instructions. Notwithstanding that holders of ADRs must have held ADRs on each such date, in order to avoid the possibility of double vote, only those positions on May 23, 2006 will be counted for voting instruction purposes. Eligible ADR holders who desire to vote at the Meeting

must complete, date and sign a proxy form and return it to JPMorgan Chase Bank, N.A. (the “Depositary”), P., P.O. Box 3500, South Hakensack, NJ 07606-3500, U.S.A., by 3:30 p.m., New York City time, on May 31, 2006.

The Shareholder Meeting Brochure and Proxy Statement (which contains reports on each item of the agenda for the meetings, and further details on voting procedures) and the forms furnished by the Company in connection with the meetings, may be obtained from any of the Company’s offices indicated above, the Depositary, Borsa Italiana SpA (Piazza degli Affari 6, 20123, Milan, Italy) and S.D. Indeval S.A. de C.V., as from April 20, 2006, between 10:00 a.m. and 5:00 p.m. (local time).

Copies of the Shareholder Meeting Brochure and Proxy Statement and the forms are also available at www.tenaris.com/investors. Copies of the Companies financial statements and the reports of the auditors as well as the documents referred to in the preceding sentence may also be obtained free of charge at the Company’s registered office in Luxembourg.

Cecilia Bilesio
Secretary of the Board of Directors

April 20, 2006
Luxembourg

RCS Luxembourg B 85 203

SHAREHOLDER MEETING BROCHURE AND PROXY STATEMENT

Annual General Meeting and Extraordinary General Meeting of Shareholders to be held on June 7, 2006

This Shareholder Meeting Brochure and Proxy Statement is furnished by Tenaris, S.A. (the “Company”) in connection with the Annual General Meeting of Shareholders and the Extraordinary General Meeting of Shareholders to be both held, for the purposes set forth in the accompanying Notice of the Annual General Meeting and Extraordinary General Meeting of Shareholders (the “Notice”), on June 7, 2006 starting at 11:00 a.m., at 46A, avenue John F. Kennedy L-1855 Luxembourg.

As of April 20, 2006, there were issued and outstanding 1,180,536,830 shares of common stock, US$1 par value, of the Company (the “Common Stock”), including shares of Common Stock (the “Deposited Shares”) deposited with Fortis Bank Luxembourg S.A., as agent for JPMorgan Chase Bank, N.A., as depositary (the “Depositary”), under the Deposit Agreement, dated as of November 11, 2002 , as amended on April 3, 2006 (the “Deposit Agreement”) among the Company, the Depositary and all holders from time to time of American Depositary Receipts (the “ADRs”) issued thereunder. The Deposited Shares are represented by American Depositary Shares), which are evidenced by the ADRs (one ADR equals two Deposited Shares).

Each holder of shares of Common Stock is entitled to one vote per share. Holders of shares that hold shares through fungible securities accounts and wish to attend the Meetings must present a certificate (issued by the financial institution or professional depositary holding such shares) evidencing such deposit and certifying the number of shares recorded in the relevant account on June 1st, 2006. Such certificate must be filed no later than 4:00 p.m. (local time) on June 1st, 2006, with any of the Company’s offices indicated in the Notice, or, in the case of shares held in Mexico, with S.D. Indeval, S.A. de C.V., in Mexico City.

Holders of shares as of June 1st, 2006 may also vote by proxy. To vote by proxy, such holders must file the requisite certificate and a completed proxy form not later than 4:00 p.m. (local time), on June 1st, 2006, with any of the Company’s offices indicated in the Notice, or, in the case of shares held in Mexico, with S.D. Indeval, S.A. de C.V., in Mexico City.

Each holder of ADRs as of April 25, 2006, which continues to hold such ADRs on May 23, 2006, is entitled to instruct JPMorgan Chase Bank, N.A., as Depositary (the “Depositary”), as to the exercise of the voting rights pertaining to the Company’s shares of Common Stock represented by such holder’s ADRs. Although voting instructions and proxy material are sent to holders as of April 25, 2006, only those Holders of record as of each of April 25, 2006 and May 23, 2006 will be entitled to provide the Depositary with voting instructions. Notwithstanding that holders of ADRs must have held ADRs on each such date, in order to avoid the possibility of double vote, only those positions on May 23, 2006 will be counted for voting instruction purposes. Eligible holders of ADRs who desire to have their shares represented by their ADRs voted at the Meeting must complete, date and sign a proxy form and return it to JPMorgan Chase Bank, N.A., P.O. Box 3500, South Hakensack, NJ 07606-3500, U.S.A. If the Depositary receives properly completed instructions by 3:30 p.m., New York City time, on May 31, 2006, then it shall vote or cause to be voted the shares underlying such ADRs in the manner prescribed by the instructions. However, if by 3:30 p.m., New York time, on May 31, 2006, the Depositary receives no instructions from the holder of ADRs, or the instructions are not in proper form, then the Depositary shall deem such holder to have instructed the Depositary to vote the underlying shares of Common Stock of any such ADRs in favor of any proposals or recommendations of the Company, for which purposes the Depositary shall issue a discretionary proxy to a person appointed by the Company to vote such shares in favor of any proposals or recommendations of the Company (including any recommendation by the Company to vote such shares on any given issue in accordance with the majority shareholder vote on that issue). No instruction shall be deemed given and no discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary it does not wish such proxy given or if the proposal has, in the discretion of the Depositary, a materially adverse effect on the rights of the holders of ADRs. Any holder of ADRs is entitled to revoke any instructions which it has previously given to the Depositary by filing with the Depositary a written revocation or duly executed instructions bearing a later date at any time prior to 3:30 p.m., New York time, on May 31, 2006. No instructions, revocations or revisions thereof shall be accepted by the Depositary after that time.

Due to regulatory differences and market practices in each country where the Company’s shares are listed, the holders of shares traded on the Argentine and Italian stock exchanges who have requested admission to the meetings, or who have issued a voting proxy, must have their shares blocked for trading until the date of the meetings, while holders of shares traded in the Mexican stock exchange and holders of ADRs traded in the New York stock exchange need not have their shares or ADRs, as the case may be, blocked for trading. However, the votes of holders of shares traded in the Mexican stock exchange who sell their shares between May 31, 2006 and June 6, 2006, shall be disregarded.

The meetings will appoint a chairperson pro tempore to preside over them. The chairperson pro tempore will have broad authority to conduct the meetings in an orderly and timely manner and to establish rules for shareholders who wish to address the meetings; the chairperson may exercise broad discretion in recognizing shareholders who wish to speak and in determining the extent of discussion on each item of the agenda.

Pursuant to the Company’s Articles of Association, resolutions at the Annual General Meeting of Shareholders will be passed by majority vote, irrespective of the number of shares present or represented. Extraordinary general meetings of shareholders convened to consider amendments to the Company’s Articles of Association can only validly meet on the first call if at least half of the share capital is present or represented. If the required quorum is not met, a second meeting may be convened by means of notices published twice, at twenty (20) days interval at least and in any case twenty (20) days before the meeting, in the Mémorial C, Recueil des Sociétés et Associations (Luxembourg Official Gazette). The second meeting can validly decide regardless of the quorum present or represented. In each case, resolutions may only be passed by a two-thirds majority of the votes of the shareholders present or represented.

The meetings are called to address and vote on the following agenda:

ANNUAL GENERAL MEETING

1. CONSIDERATION OF THE BOARD OF DIRECTORS’ AND INDEPENDENT AUDITOR’S REPORTS ON THE CONSOLIDATED FINANCIAL STATEMENTS. APPROVAL OF THE COMPANY’S CONSOLIDATED FINANCIAL STATEMENTS AS OF, AND FOR THE FISCAL YEAR ENDED, DECEMBER 31, 2005.

The Board of Directors recommends a vote FOR approval of the Company’s consolidated financial statements for the fiscal year ended December 31, 2005, and having considered the reports from each of the Board of Directors and the independent auditors on such consolidated financial statements. The consolidated balance sheet of the Company and its subsidiaries at December 31, 2005 and the related consolidated statement of income, consolidated statement of changes in shareholders’ equity, consolidated cash flow statement and notes to the consolidated financial statements, the independent auditors’ report on such consolidated financial statements and management’s discussion and analysis on the Company’s results of operations and financial condition are included in the Company’s annual report 2005, a copy of which is available on our website at www.tenaris.com/investors and may also be obtained upon request at 1 800 990 1135 (if you are in the United States) or 201 680 6630 (if you are outside the United States).

2. CONSIDERATION OF THE BOARD OF DIRECTORS’ AND INDEPENDENT AUDITOR’S REPORTS ON THE UNCONSOLIDATED ANNUAL ACCOUNTS. APPROVAL OF THE COMPANY’S UNCONSOLIDATED ANNUAL ACCOUNTS AS OF, AND FOR THE FISCAL YEAR ENDED, DECEMBER 31, 2005.

The Board of Directors recommends a vote FOR approval of the Company’s unconsolidated annual accounts as of, and for the fiscal year ended, December 31, 2005, and having considered the report from each of the Board of Directors and the independent auditors on such unconsolidated annual accounts. These documents are included in the Company’s annual report, a copy of which is available on our website at www.tenaris.com/investors and may also be obtained upon request at 1 800 990 1135 (if you are in the United States) or 201 680 6630 (if you are outside the United States).

3. ALLOCATION OF RESULTS AND APPROVAL OF DIVIDEND PAYMENT.

The Board of Directors recommends a vote FOR approval of an annual dividend in U.S. dollars in an amount of US$0.30 per share. As required by Luxembourg law, the total dividend amount includes the interim dividend declared by the Board of Directors in accordance with Luxembourg law on November 8, 2005, and paid on November 16, 2005, in an amount of US$0.127 per share. Accordingly, if this annual dividend proposal is approved, the Company will make a cash dividend payment to shareholders on June 16, 2006 in the amount of US$0.173 per share issued and outstanding on June 13, 2006. Since each ADR is equivalent to two ordinary shares following the adjustment in the ADR ratio made on April 17, 2006, this dividend payment amount of US$0.173 per share is equivalent to US$0.346 per ADR.

The aggregate amount of US$149,928,177 distributed as interim dividend on November 16, 2005, was paid from earnings from the nine-month period ended September 30, 2005, The aggregate amount of US$204,232,872 to be distributed as dividends after the date hereof shall also be paid from profits earned during the year ended December 31, 2005.,The balance of the fiscal year’s profits will be allocated to the Company’s retained earnings account.

Upon approval of this resolution, the Board of Directors shall determine, in its discretion, the terms and conditions of the dividend payment, including the applicable record date.

4. DISCHARGE TO THE MEMBERS OF THE BOARD OF DIRECTORS.

In accordance with applicable Luxembourg law and regulations, it is proposed that, upon approval of the Company’s accounts for the year ended December 31, 2005, the members of Board of Directors be discharged of any responsibilities in connection with the management of the Company’s affairs during such year.

5. ELECTION OF THE BOARD OF DIRECTORS’ MEMBERS.

The Company’s Articles of Association provide for the annual election by the holders of Common Stock of a Board of Directors of not less than five and not more than fifteen members. Members of the Board of Directors have a term of office of one year, but may be reappointed.

Under applicable U.S. laws and regulations, effective on July 15, 2005, the Company is required to have an audit committee comprised solely of directors who are independent.

The present Board of Directors of the Company consists of nine Directors. Three members of the Board of Directors (Messrs. Jaime Serra Puche, Amadeo Vázquez y Vázquez and Roberto Monti) qualify as independent members under the Company’s Articles of Association and applicable law.

It is proposed that the current members of the Board of Directors be re-elected.

Set forth below is summary biographical information of each of the candidates:

1) Mr. Roberto Bonatti. Mr. Bonatti is president of San Faustín N.V., Tecpetrol S.A. and Techint Compañía Técnica Internacional S.A.C.I. of Argentina. He is also a member of the board of directors of Ternium S.A., Siderca S.A.I.C. and Siderar S.A.I.C. Mr. Bonatti is an Italian citizen.

2) Mr. Carlos Manuel Franck. Mr. Franck is president of Santa María, vice president of Siderca S.A.I.C. and a member of the board of directors of Techint Financial Corporation N.V., I.I.I. Industrial Investments Inc., Siderar S.A.I.C., Tecpetrol and Tecgas. Mr. Franck is an Argentine citizen.

3) Mr. Bruno Marchettini. Mr. Marchettini has recently retired from executive positions, and continues to be the referent advisor in steel technology matters He is member of the board of directors of San Faustín N.V., Ternium S.A. and Siderar SA.I.C. Mr. Marchettini is an Italian citizen.

4) Mr. Roberto Monti*. Mr. Monti is a non-executive chairman of Trefoil Limited., member of the board of directors of Petrobras Energia, Transocean Offshore Drilling and of John Wood Group PLC. Served as vice president of Exploration and Production of Repsol YPF and vice president of the board of directors of YPF. He was also president of Dowell, a subsidiary of Schlumberger and president of Schlumberger division of East hemisphere, Wireline & Testing from South America. Mr. Monti is an Argentine citizen.

5) Mr. Gianfelice Mario Rocca. Mr. Rocca is chairman of the board of directors of San Faustín, a member of the board of directors of I.I.I. Industrial Investments Inc., Tenaris S.A., Dalmine S.p.A., Tubos de Acero de México, S.A. and Ternium S.A., president of the Humanitas Group and president of the board of directors of Techint Compagnia Tecnica Internazionale S.p.A., Techint S.A. de C.V. In addition, he sits on the board of directors or executive committees of several companies, including Sirti S.p.A., Ras, RCS Quotidiani, Fastweb, Buzzi Unicem and Cam Finanziara S.p.A. He is vice president of Confindustria, the leading association of Italian industrialists. He is a member of the European Advisory Board of the Harvard Business School, the Trilateral Commission. Mr. Rocca graduated in Physics cum laude at the University of Milan and holds a postgraduate degree from the Harvard Business School. Mr. Rocca is an Italian citizen.

6) Mr. Paolo Rocca. Mr. Rocca is chairman of our board of directors and our chief executive officer. He is also chairman of the board of directors of Tubos de Acero de Mexico, S.A. (“Tamsa”) and of Dalmine, S.p.A. and vice president of Confab Industrial S.A. He is also chairman of the board of Ternium S.A. and director and vice president of San Faustín N.V. and director of Techint Financial Corporation N.V. Mr. Rocca is member of the Executive Committee of the IISI (International Iron and Steel Institute), member of the International Advisory Committee of the NYSE (New York Stock Exchange) and

member of the Private Sector Advisory Council of the IDB (Inter-American Development Bank). Mr. Rocca is an Italian citizen.

7) Mr. Jaime Serra Puche*. Mr. Serra Puche is chairman of SAI Consultores, and a member of the board of directors of Chiquita Brands International, The Mexico Fund, Vitro and Grupo Modelo. Mr. Serra Puche served as Mexico’s Undersecretary of Revenue, Secretary of Trade and Industry, and Secretary of Finance. He led the negotiation and implementation of NAFTA. Mr. Serra Puche is a Mexican citizen.

8) Mr. Amadeo Vázquez y Vazquez*. Mr. Vázquez y Vázquez is chairman of the board of directors of Telecom Argentina S.A., a director of Gas Natural Ban, S.A., second vice president of Asociación de Empresas de Servicios Privatizados and third vice president of Cámara Argentina de Comercio, and Vocal of the Executive Committee of Asociación Empresaria Argentina. Mr. Vázquez y Vázquez is an Argentine citizen.

9) Mr. Guillermo F. Vogel. Mr. Vogel is vice chairman of Tamsa, vice chairman of the American Iron & Steel Institute, chairman of the North American Steel Council, chairman of Grupo Collado, vice chairman of Estilo y Vanidad S.A. de C.V.. Mr. Vogel is a Mexican citizen.

* Independent directors

Each elected director will hold office until the next annual meeting of shareholders. Under the current Company’s Articles of Association, such meeting is required to be held on June 6, 2007.

The Board of Directors of the Company met six times during 2005. On January 31, 2003, the Board of Directors created an Audit Committee pursuant to Article 11 of the Articles of Association. As permitted under applicable laws and regulations, the Board of Directors does not have any executive, nominating or compensation committee, or any committees exercising similar functions.

6. AUTHORIZATION TO THE BOARD OF DIRECTORS TO DELEGATE THE DAY-TO-DAY MANAGEMENT OF THE COMPANY’S BUSINESS AND THE POWER TO REPRESENT THE COMPANY AS “ADMINISTRATEUR DÉLÉGUE” (CHIEF EXECUTIVE OFFICER) TO MR. PAOLO ROCCA (WITH FULL POWER OF SUB-DELEGATION).

In order to provide for the necessary flexibility in the management of the Company’s affairs, it is proposed that the management of the Company’s day-to-day business and power to represent the Company as administrateur délégué be delegated to Mr. Paolo Rocca, Chairman of the Board of Directors and Chief Executive Officer of the Company. The chief executive officer will have the power to sub delegate the authority to represent the Company in connection with specific transactions or matters relative to the duties of the chief executive officer.

7. AUTHORIZATION TO THE BOARD OF DIRECTORS TO APPOINT ANY OR ALL OF ITS MEMBERS AS THE COMPANY’S ATTORNEYS-IN-FACT INCLUDING IN GENERAL DAY TO DAY MANAGEMENT OF THE COMPANY.

In order to provide for the necessary flexibility in the management of the Company’s affairs, it is proposed that the General Shareholders’ Meeting of the Company authorises the Board of Directors to appoint any or all members of the Board from time to time as the Company’s attorney-in-fact, delegating to such directors any management powers to the extent the Board may deem appropriate in connection therewith, this authorisation to be valid until expressly revoked by the Company’s General Shareholders Meeting.

It being understood, for the avoidance of doubt, that this authorisation shall not revoke, substitute, impair nor limit in any way the authorisation granted by the General Shareholders Meeting of the Company for the delegation of the day-to-day management of the Company and the authority to represent and bind the Company in such day-to-day management to Paolo Rocca, Chairman of the Board of Directors and Chief Executive Officer of the Company (administrateur délégué).

8. AUTHORIZATION TO THE BOARD OF DIRECTORS TO CAUSE THE DISTRIBUTION OF ALL SHAREHOLDER COMMUNICATIONS, INCLUDING ITS SHAREHOLDER MEETING AND PROXY MATERIALS AND ANNUAL REPORTS TO SHAREHOLDERS BY SUCH ELECTRONIC MEANS AS ARE PERMITTED OR REQUIRED BY ANY APPLICABLE LAWS OR REGULATIONS.

In order to expedite shareholder communications and ensure their timely delivery, the Board of Directors recommends that it be authorized to cause the distribution of all shareholder communications, including its shareholder meeting and proxy materials and annual reports to shareholders (either in the form of a separate annual report containing financial statements of the Company and its consolidated subsidiaries or in the form of a Form 20-F or similar document, as filed with the securities authorities or stock markets) by such electronic means as are permitted or required by any applicable laws or regulations

(including any interpretations thereof), including, without limitation, by posting such communication on the Company’s web site, or by sending an email with attachment in a widely used format or with a hyperlink to the applicable filing by the Company on the website of the above referred authorities or stock markets, or by any other existing or future electronic means of communication.

9. BOARD OF DIRECTORS’ COMPENSATION

It is proposed that each of the members of the Board of Directors receive an amount of US$50,000 as compensation for their services during the fiscal year 2006. It is further proposed that the Chairman of the Audit Committee receive an additional fee of US$60,000 and that the other Directors who are members of such Committee receive an additional fee of US$50,000.

10. APPOINTMENT OF INDEPENDENT AUDITORS AND APPROVAL OF THEIR FEES

Based on the recommendation from the Audit Committee, the Board of Directors of the Company recommends a vote FOR the appointment of PricewaterhouseCoopers S.àr.l., Réviseur d’entreprises, member firm of PricewaterhouseCoppers, as the independent auditors of the Company for the fiscal year ending December 31, 2006, to be engaged until the next annual general meeting that will be convened to decide on the 2006 accounts.

In addition, the Board of Directors recommends a vote FOR approval of an amount up to US$3,489,838 payable to the independent auditors as fees for audit services and audit related services to be rendered during the fiscal year ending December 31, 2006. Such fees cover the audit of the Company’s consolidated financial statements and annual accounts, the audit of the Company’s internal controls over financial reporting as mandated by the Sarbanes-Oxley Act of 2002, and other audit related services.

EXTRAORDINARY GENERAL MEETING

1. AMENDMENT OF ARTICLE 11 OF THE ARTICLES OF ASSOCIATION TO REQUIRE THE AUDIT COMMITTEE TO REPORT TO THE BOARD OF DIRECTORS ON ITS ACTIVITY AND ON THE ADEQUACY OF THE INTERNAL CONTROL SYSTEM ONCE A YEAR.

Taking into consideration the need to reconcile the multiple reporting obligations to which the Company is subject as a result of the listing of its securities in four jurisdictions with those that apply to similar public companies to meet market expectations, it is proposed to require the Audit Committee to report to the board of directors on its activity and on the adequacy of the internal control system once a year, rather than every six months.

Article 11 of the Articles of Association, as amended, would read as follows:

“Article 11. Article 11. Powers. The board of directors is invested with the broadest powers to act on behalf of the Company and accomplish or authorize all acts and transactions of management and disposal which are within its corporate purpose and which are not specifically reserved to the general meeting.

The Company will be bound by the joint signature of two directors or the sole signature of any persons to whom such signatory power shall be delegated by the board of directors.

The board of directors is invested with the power to interpret and apply the present Articles of Association and to issue guidelines and rules for that purpose.

Within the limits of applicable law, the board of directors may:

1. delegate to one or more persons, whether or not members of the board of directors, the powers necessary to carry out its decisions and to provide day-to-day management; provided that the approval of material transactions with related parties shall not be delegated and the opinion of the Audit Committee on such material transactions shall be taken into consideration prior to their approval by the board of directors;

2. confer to one or more persons, whether or not members of the board of directors, the powers deemed to be appropriate for the general technical, administrative and commercial management of the Company;

3. constitute an Audit Committee, made up by directors, determining its function and authority;

The board may authorize all substitutions in the powers it may confer or has conferred.

In case the shares of the Company are listed on a regulated market, the Company shall have an Audit Committee composed of three members, two of which, at least, shall qualify as Independent Directors. The members of the Audit Committee shall not be eligible to participate in any incentive compensation plan for employees of the Company or any of its subsidiaries. The Audit Committee shall (I) assist the board of directors in fulfilling its oversight responsibilities relating to the integrity of the financial statements of the Company, the Company’s system of internal controls and the independence and performance of the Company’s internal and independent auditors. It shall also perform the other duties entrusted to it by the board of directors, particularly as regards relations with the independent auditor and (II) review material transactions between the Company or its subsidiaries with related parties to determine whether their terms are consistent with market conditions or are otherwise fair to the Company and its subsidiaries. To that end,

and

(B) the term «related party» shall mean any of the following persons in relation to the Company or the subsidiaries of the Company: (i) a member of the board of directors of the Company or of any of the subsidiaries; (ii) any company or person that controls directly or indirectly the Company or is a member of the board of directors of a company controlling directly or indirectly the Company; (iii) any company or person that holds a significant interest in the equity of the Company or of a subsidiary of the Company; (iv) spouses, parents, siblings or relatives up to the third degree of any person referred to in (i), (ii) or (iii); and (v) companies in whose equity the persons referred in (i) and (iii) hold a significant interest.

The board of directors shall appoint one of the members of the Audit Committee as its Chairman. The Audit Committee shall report to the board of directors on its activity and the adequacy of the internal control system once a year, at the time the annual accounts are approved.

For the purpose of the present Articles of Association, the term «Independent Director» shall mean a director who:

(i) is not, and has not been employed by the Company or its subsidiaries in an executive capacity, within the five years immediately prior to the annual meeting at which the nominees of the board of directors will be voted upon;

(ii) is not a person that directly or indirectly controls the Company and is not a member of the board of directors of a company controlling directly or indirectly the Company;

(iii) has not (and is not affiliated with a company or a firm that has) a significant business relationship with the Company, its subsidiaries or the person that directly or indirectly controls the Company;

(iv) is not, and has not been affiliated with or employed by a (present or former) auditor of the Company, its subsidiaries or the person that directly or indirectly controls the Company, within the five years immediately prior to the annual meeting at which the nominees of the board of directors will be voted upon;

(v) is not a spouse, parent, sibling or relative up to the third degree of any person above described from (i) to (v).

The Board of Directors believes that the proposed amendment to the Articles of Association is in the best interests of the Company and its stockholders and accordingly recommends a vote FOR this proposal.

The Company anticipates that the next Annual General Meeting of Shareholders will be held on June 6, 2007. A holder of shares who intends to present a proposal at the next Annual General Meeting must submit the proposal in writing to the Company at any of the offices indicated in the Notice not later than 4:00 P.M. (local time) on March 31, 2007, in order for such proposal to be considered for inclusion on the agenda for the 2007 annual general meeting of shareholders.

          Annual Report 2005

§		Company profile
§		Leading indicators
§		Chairman’s letter
§		Business review
§		Communities and environment review
§		Corporate governance
§		Board of directors and executive officers
§		Operating and financial review
§		Consolidated financial statements
§		Report and audited annual accounts of Tenaris S.A. (Luxembourg GAAP)
§		Corporate information

Cautionary statement

Some of the statements contained in this Annual Report are “forward-looking statements”. Forward-looking statements are based on management’s current (March 2006) assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include, but are not limited to, risks arising from uncertainties as to future oil and gas prices and their impact on the investment programs by oil and gas companies.

Certain figures included in this Annual Report have been subject to rounding adjustments. Accordingly, figures shown as totals in tables may not be the sum of the figures that precede them, and percentages in the text may not total 100% or may not be the sum of the percentages that precede them.

Company profile

Tenaris is the leading global manufacturer of seamless steel pipes for the world’s oil and gas industry and a leading global supplier of seamless steel pipes for process and power plants and for industrial and automotive applications. We are also the leading regional supplier of welded steel pipes for oil and gas pipelines in South America. Our customers include most of the world’s major oil and gas companies as well as a large number of engineering and industrial companies.

Domiciled in Luxembourg, we have manufacturing facilities in Argentina, Brazil, Canada, Italy, Japan, Mexico, Romania and Venezuela and specialized R&D and proprietary global service and distribution networks. Our annual manufacturing capacity is 3.3 million tons of seamless and 930 thousand tons of welded pipes. With this infrastructure and our 17,500 employees, we focus on providing end-user customers a service that integrates manufacturing, procurement, distribution and on-time delivery of high quality products throughout the world.

We aim for long-term sustainable growth to reward our shareholders and to give opportunities for our employees. And since we recognize that much of our success results from the contribution of our local communities, we work hard to help them share in the opportunities that such success makes possible and to minimize the environmental impact of our activities on them.

Leading indicators

		2005				2004				2003
SALES VOLUMES (thousands of metric tons)
Seamless pipes			2,870				2,646				2,278
Welded pipes			501				316				355
Total steel pipes			3,371				2,963				2,633
PRODUCTION VOLUMES (thousands of metric tons)
Seamless pipes			2,842				2,631				2,275
Welded pipes			476				366				346
Total steel pipes			3,318				2,997				2,621
FINANCIAL INDICATORS (millions of USD)
Net sales			6,736				4,136				3,180
Operating income			1,948				814				288
EBITDA (1)			2,163				899				602
Net income (2)			1,387				805				222
Free cash flow (3)			1,011				(85	)			113
Capital expenditures			284				183				163
BALANCE SHEET (millions of USD)
Total assets			6,706				5,662				4,310
Total financial debt			1,010				1,259				834
Net financial debt (4)			183				828				448
Total liabilities			2,930				3,001				2,348
Shareholders’ equity including minority interest			3,776				2,661				1,961
PER SHARE / ADS DATA (USD PER SHARE / PER ADS)
Number of shares outstanding (5) (thousands of shares)			1,180,537				1,180,537				1,180,288
Earnings per share			1.08				0.66				0.18
Earnings per ADS			10.82				6.65				1.78
Dividends per share (6)			0.30				0.11				0.10
Dividends per ADS (6)			2.96				1.14				0.99
ADS Stock price at year-end			114.50				48.90				33.32
Number of employees (5)			17,693				16,447				14,391

Chairman’s letter

Dear Shareholders,

2005 was a year when many of the supply issues facing the energy industry came into stark focus. The difficulties of increasing global oil and gas production to keep pace with continuing increases in demand and declines in production from the fields in operation today were reflected in yet higher oil and gas prices. There are tremendous challenges to gain access to new exploration and production areas, to expand infrastructure both upstream and downstream and to incorporate and train human resources throughout the supply chain.

Production output from the world’s largest and most productive oilfields, most of which were discovered more than 30 years ago, is now firmly declining. As fields become less productive, more wells need to be drilled to produce a similar level of output. And as the most accessible fields have already been developed, drilling activity is taking place increasingly in more complex operating environments, both from the technological and the geopolitical perspective.

For Tenaris, this operating background presents tremendous opportunities as well as responsibilities. As the leading supplier of seamless pipes to the oil and gas industry worldwide, we are benefiting from increased demand for products that can perform in technologically challenging environments such as deep and ultra-deepwater, highly corrosive conditions and the Arctic. At the same time, we have to ensure that our customers have access to the products and services they need when they need them, even in the most remote areas of the world.

Over the past few years, Tenaris has been investing in the development of new products such as our high performance TenarisBlue^® premium connections, proprietary sour service OCTG steel grades and high specification line pipe for deepwater and ultra-deepwater applications, as well as the facilities required to produce them. We have also been establishing long-term source of supply relationships and building full-service bases in key regions around the world. We are accompanying our customers to remote locations and integrating our mill production capabilities to their drilling operations through a flexible and efficient supply chain management system.

The results of these past efforts were in evidence in 2005. We increased sales by volume of high-end products by 25% and consolidated our position in the OCTG market. During the year, we launched a two-year, USD 350 million investment program at our mills to add new finishing lines, heat treatment capacity and other capabilities required for the manufacture of specialized, high-end products used in the most demanding applications. We are also strengthening our research and development and product qualification capabilities by investing in a new research facility in Mexico and expanding our access to research facilities in Italy. Our product development budgets have been growing rapidly and we are reinforcing our R&D personnel.

To help us match the expectations of our customers, we remain focused on investing in our industrial system, in automation and in the information technology supporting the integration of our industrial and supply chain systems, as well as in the training of our personnel at all levels of the organization. We acquired a steel shop in Romania and integrated our operations in Eastern Europe.

Our financial results for the year reflect the favorable environment and our exceptional positioning in the market. Net sales for the year rose to USD 6.7 billion and EBITDA to USD 2.2 billion. Earnings per share rose 63% to USD 1.08, or USD 10.82 per ADS. We are proposing to pay a final dividend for the year of USD 0.173 per share (USD 1.73 per ADS) in June, which, in addition to the interim dividend of USD 0.127 per share (USD 1.27 per ADS) paid in November, would make for a total annual dividend of USD 0.30 per share (USD 3.00 per ADS), an increase of 78% over the previous year.

Once again, our employees have responded well to the challenge and high workload of a demanding market. I want to thank all of them for their efforts and also express my thanks to our customers, suppliers and shareholders for their continuous support and confidence in Tenaris.

March 1, 2006
Paolo Rocca

Business review

Market background and outlook

In 2005, further increases in exploration and production spending by oil and gas companies and increased drilling activity, reflecting high oil and gas prices and continuing increases in global demand for oil and gas, led the increase in demand for seamless pipe products. The international count of active drilling rigs, as published by Baker Hughes, averaged 929 during the fourth quarter of 2005, an increase of 8% compared to the same quarter of the previous year and an increase of 9% for the year overall compared to 2004. The corresponding percentage annual rig count increases in the Canadian and US markets, which are more sensitive to natural gas prices, were 24% and 16% respectively.

We estimate that global apparent consumption of seamless OCTG (oil country tubular goods) in 2005 grew around 17% compared to 2004, and will grow further in 2006. Demand for other seamless products also increased contributing to an overall estimated increase in apparent consumption of seamless pipe products worldwide of around 9% in 2005 over 2004. Demand from the energy sector for our high-end seamless pipe products, including premium connections, used in complex drilling and other high-performance applications grew strongly in 2005 and should grow further in 2006.

Favorable market conditions and increased demand for high-end seamless pipe products helped us to record strong sales growth and a higher gross margin for our seamless pipe products as higher average selling prices were more than sufficient to offset the impact of higher raw material, energy and labor costs. We expect that the continuation of favorable market conditions and increased demand for high-end seamless pipe products will result in further sales growth and that we will maintain our operating margins at the higher levels shown in 2005.

Demand for our welded pipe products, which depend to a substantial extent on specific projects, particularly those for the construction of oil and gas pipelines in the regional market of our two welded pipe mills in South America, can vary significantly from year to year. In 2005, demand for our welded pipe products benefited from gas and mineral slurry pipeline projects in Brazil and from gas pipeline expansion projects in Argentina. We expect demand for our welded pipe products in 2006 to be affected by delays to the implementation of projects in Brazil and Argentina which will result in reduced sales and margins on welded pipes for the year.

Summary of results

Our results reflect the strong performance of our seamless pipe business. We are the leading supplier of seamless pipe products to the global energy industry and have been increasing our sales of high-end products, such as premium connections, sour service and high collapse grades used in deeper and more corrosive environments and special deepwater line pipe for risers andflowlines. Net sales of our seamless pipes, which accounted for 76% of our total net sales, rose 57% with particularly strong growth recorded in the Middle East and Africa region. Our welded pipe business also enjoyed a good year with strong demand for welded pipes for gas pipeline projects in its regional markets of Brazil and Argentina.

Operating income rose 140% to USD 1,948 million, or 29%of net sales, compared to USD 814 million, or 20% of net sales, in 2004. Excluding a one-time operating income gain of USD 123 million recorded in 2004 in respect of an arbitration award, operating income plus depreciation and amortization rose 141% to USD 2,163 million, or 32% of net sales, compared to USD 899 million, or 22% of net sales, in 2004.

Free cash flow (net cash provided by operations less capital expenditures) during the year rose to USD 1,011 million, compared to an outflow of USD 85 million in 2004. This strong free cash flow was used to fund the acquisition of a Romanian steel shop, increase dividends and to reduce our net debt position.

Capital expenditures in 2005 rose to USD 284 million, compared to USD 183 million in 2004, and are expected to increase further in 2006 due to our investment program to add the finishing lines, heat treatment capacity and other capabilities required to increase our capacity to produce high-end products.

Oilfield Services

We supply a comprehensive range of high quality seamless casing and tubing, premium connections and accessories for use in the most demanding oil and gas drilling and well completion activities. Using our unique network of manufacturing, customer service and R&D facilities, we focus on reducing costs for our customers through integrated supply chain management and developing industryleading products.

Industry acceptance and qualification of our TenarisBlue® premium connection continued apace during 2005. It was run for the first time in countries such as Mexico, the US and Qatar and sales were made for the first time to the operations of Repsol YPF in North Africa, OMV and Apache in Oceania, BHP in Trinidad, Chevron in Nigeria and the UK and BP in

Venezuela. In Canada, it is now widely used along with the newly introduced TenarisBlue® SAGD by operators including Husky, Shell, Nexen and Suncor.

TenarisBlue® is starting to become the connection of choice for the most challenging environments. ConocoPhillips is using it in high-pressure, hightemperature wells in the North Sea, as is Total in Indonesia, and Panamerican Energy has been using it for its extended reach horizontal wells in Argentina. In its Dopeless™ version, it has been successfully run throughout the year at Statoil’s Snøhvit field in the Barents Sea in a range of carbon, 13 Cr and 25 Cr steels, and is gaining acceptance among customers like Saudi Aramco and ENI for its operational efficiencies and effectiveness in reducing risks and running time at the rig.

We extended the TenarisBlue® premium connection platform with the introduction of the TenarisBlue® Near Flush, an integral connection for use in slim wells, and the TenarisBlue® SAGD, a connection specially designed for use with slotted liners. We also started construction of a new R&D center in Mexico to increase our testing and qualification capacity and complement our research capabilities. The new center will perform high capacity, full scale testing of premium connections and risers.

Our strategic alliance with Sandvik, a worldleading producer of stainless and high-alloy steels, delivered excellent results. The award of contracts to supply Sandvik CRA materials with TenarisBlue® connections for QatarGas III and IV and Shell Pearl GTL was particularly noteworthy.

Among other initiatives, we signed a global agreement with Schlumberger to provide tubular goods and services for their Integrated Project Management (IPM) operations and strengthened our capability to supply integrated supply chain management services in strategic locations with the start up of threading facilities in Kazakhstan and by starting construction of a new service base in Egypt which will support Petrobel’s operations under a new long-term agreement.

Pipeline Services

We supply an extensive range of tailor-made seamless pipes, complete with coatings and accessories for use in every operating environment —onshore, offshore and deepwater. Our focus is on providing the risers, flowlines and subsea tubular components for the deepwater and ultra-deepwater markets where we are a major player in the Gulf of Mexico, West Africa, United Kingdom and Scandinavia.

As the industry moves further into frontier deepwater exploration and production projects, increasingly stringent technical requirements are required for our products. During the year, we made significant progress in developing higher yield strength, weldable steel grades with reduced wall thickness for uses where the host payload is mission critical, as well as in pipe insulation and pipe geometry technology.

For the Dalia project in offshore Angola, we successfully met the challenge of manufacturing double joint pipe meeting the X65 reel-laid requirements specified by the laying contractor.

Using our new welding laboratory in Veracruz, we were able to provide Technip continual trials, quality testing and an engineering critical assessment for the reeling application, and then delivered 8,500 tons of double joint pipe for installation on the sea-floor in water depths of 1,200-1,500 meters. Following the success of this project, Technip selected us to supply 8,800 tons of pipe with welded anode pads, coating and sorting services to be used for the undersea flowlines for BP’s six-field development known as Greater Plutonio with shipment due in 2006.

Other important project awards included Anadarko’s Independence Hub in the Gulf of Mexico, where we will manufacture 17,800 tons of pipe meeting stringent dimensional tolerances for risers and flowlines reaching a depth of 8,000 ft, Chevron’s Tahiti in the Gulf of Mexico where we will supply pipe for risers and flowlines, Total’s Akpo in Nigeria, where we will provide 23,000 tons of pipe for the gas export line and ConocoPhillips’ BritSat in the UK.

As we seek to align our capabilities with the increasingly complex technological needs of our customers we are stepping up our involvement in joint industry programs, which provide a forum for key industry players to share information on pipeline issues. In July, we launched a collaborative program called Strainweld, whose purpose is to involve customers in the study and evaluation of currently accepted hardness levels for C-steel girth welds intended for sour service and which are subjected to severe plastic straining during the installation process.

Process & Power Plant Services

We provide comprehensive material planning and supply chain management services and on-time delivery of quality products to enable customers in the process and power plant industry meet the demanding needs of major refinery, petrochemical and power plant contracts.

Downstream project activity surged during the year with gas projects in the Middle East to the fore. We supplied pipes for the second phase construction of the two process trains at the QatarGas II project, the world’s largest LNG project, as well as various NGL and other gas processing plants. For 2006, there are a number of large refinery projects on the drawing board.

Investments in capital projects in the processing industry are substantial with the average project size considerably larger than in recent years. This has a substantial impact on material supply needs, which has been exacerbated by the tight global market for seamless pipe products. The securing of material availability has become a critical element for most large projects today. We have been adjusting to the new environment, with the uniquely different aspects of material planning required for these mega-projects, by implementing new ways of working focused on mill reservation protocols. This has also involved the strengthening of strategic supplier relationships with leading global engineering companies such as Technip, Snamprogetti, Bechtel, KBR and Chiyoda.

Activity in the power generation sector remained strong in 2005 again led by China, where rapid economic growth and soaring domestic energy consumption continues to create demand for new and upgraded power generation plants. Long-term prospects for this sector are encouraging and we are focusing several R&D initiatives and investments for the particular tubular requirements of this sector.

Industrial & Automotive Services

We provide a wide variety of seamless pipe products for industrial applications with a focus on segments such as automotive components, hydraulic cylinders, construction machinery, gas cylinders and architectural structures where we can add value with our specialized product development and supply chain management expertise. Sales are concentrated in Europe, particularly Italy, where our mill has traditionally served this market, but we also have significant sales in North America, the Far East and Mercosur.

Early expectations that the European industrial and automotive market would return to growth in 2005 proved optimistic and, with some exceptions, the market remained flat. With competition from low-cost producers in countries entering the European Union and other Eastern European countries as well as constrained mill capacity allocation, we focused on strengthening our position in applications where we can differentiate our product offering through high technology content backed up by an integrated service program. Progress was made in integrating services such as just-in-time delivery of machined components into automotive sector supply agreements and in consolidating a leadership position in the industrial hydraulics sector.

Our Romanian mill, Silcotub, was fully integrated into our European commercial system and is providing a strategic option for sales to industrial and automotive customers in the expanded EU market. In order to serve small lot end-users in Romania we set up a network of authorized distributors following the model established in Italy. During the year, there was a significant increase in production of cold-drawn tubes for the automotive business, due in part to the growth of the Romanian automotive sector led by the Renault-Dacia Logan project.

In the NAFTA market we consolidated our leadership position in the inflators for airbags market through the expansion of our new automotive component center in Veracruz. The production capacity of this facility was increased from 14.4 million pieces a year to 24 million pieces. We have also increased capacity of our cold drawing facilities to support the growth in demand for machined automotive components, which, in addition to airbag inflators, include CV joints, half shafts, ring gears and trailer axles.

We have been developing new high strength steel grades, including a new steel grade suitable for ring gear manufacturing, as well as investigating various conversion processes for component manufacturing.

Welded

Demand for natural gas and oil in Brazil and Argentina continued to rise, supported by economic growth and the increasing weight of natural gas in Brazil’s energy mix. Major infrastructure projects were executed to transport natural gas and minerals, which had been postponed in the past. In Brazil, gas transportation projects included the Coari Manaus project that links the Amazon region, Manati onshore and offshore, Catu-Carmopolis-Pilar, and Cabiunas-Victoria (GASENE) in the Southeast and Northeast regions of the country.

In the mining sector, the most important project included the Paragominas bauxite slurry pipeline to supply the Alunorte plant, the first such pipeline built in the world. In Argentina, the gas pipeline infrastructure was expanded by building loops on the existing gas pipelines.

Toward the end of the year, demand for welded pipes for projects in the regional market weakened, primarily because of delays in the definition of the second segment of GASENE (Cacimbas- Catu), Gasfor II in Brazil, and new gas pipeline loops in Argentina.

Tenaris, in association with Socotherm, built a new pipe coating plant in the state of Espiritu Santo, Brazil. The plant incorporates advanced pipe coating technology, which will help us to meet customer needs in oil and gas exploration in both deepwater and ultra-deepwater environments.

The outlook for 2006 is a little uncertain, as we await definition of the GASENE project and the loops in Argentina; exports are expected to make up a higher share of sales.

Brazil continues with a shortage of gas transportation capacity, primarily in the north-east of the country, where gas is used for thermoelectric generators. Expansions are also expected in the south of the country, a region that uses natural gas for its industry, where users are currently awaiting definitive arrangements for supply from Bolivia. In oil transportation, Petrobras is going ahead with the PDET offshore project, to transport oil in the area of the Campos basin.

In the mining sector, Samarco has recently awarded us a contract to supply pipes for a new 345-km 16” pipes that will transport iron ore from the state of Minas Gerais to the coast of Espiritu Santo.

In export markets, demand and prices for natural gas and oil remain high, a situation that favors the implementation of major pipeline project opportunities in North America and Africa.

In January 2006, we acquired a second welded pipe facility in Argentina for USD 28 million. The facility is located in Villa Constitucion, Santa Fe, and has an annual capacity of 80,000 tons of welded pipes whose small diameter size range largely complements the range of welded pipes that we already produce in Argentina.

Energy

Dalmine Energie, our Italian energy supply business, provides energy and energy services to customers in the Italian industrial, commercial and public sectors. The company offers tailor-made packages that combine electricity, natural gas and energy services and other related products, such as energy hedging and risk management, on-site maintenance services and energy optimization advisory.

Started in 2000 shortly after the partial deregulation of the Italian energy business, Dalmine Energie has increased sales and now has a wide customer base and sold to third parties around 3 TWh of electricity and around 950 million cubic meters of natural gas in 2005.

As a leading energy supplier to the Italian industrial and commercial markets, Dalmine Energie has established successful partnerships with multinational companies like Coca Cola, McDonald’s, Bayer, Finmeccanica and Brembo, as well as many trade associations representing the bulk of the Italian energy-intensive industrial base. The basis for all these relationships is a commitment to be the single point of reference for all the energy needs of its customer. With the implementation in the EU of the Emission Trading Scheme to comply with the greenhouse gases emissions targets set by the Kyoto Protocol on climate change, Dalmine Energie is also advising its customers on adapting to an emissionconstrained world of CO2 targets compliance.

Following the initial development of the core electricity and natural gas supply activities, Dalmine Energie has been consolidating a portfolio of services that meets the needs of our customers. Examples of this strategy are the development of the energy appliances and networks maintenance service and the operation and maintenance of onsite power and cogeneration plants.

Communities and environment review

Tenaris’s history is deeply entwined with that of the communities where it has its roots. As a longterm industrial project, the essential framework governing its relations with its communities was established many years ago. It departs from the deeply-held conviction of our founding family that the continuing strength of the Company depends on an active participation that links its own development to that of its suppliers, customers, employees, and the communities in which it resides.

This framework encompasses continuous commitments to promoting health and safety among employees, to minimizing the impact of operations on the environment, to maintaining transparent relations with suppliers, customers, employees and local communities, and to working with local authorities and non-governmental organizations to promote education and foster self-reliance.

As a global company with a strong local focus, we employ a workforce of tremendous diversity. This requires strong integration of global and local functions, a high capacity to adapt to local conditions and a clear commitment of the Company’s values. Respect for cultural, gender and language differences is a guiding principle for relations among employees at all levels of the Company. This rich cultural diversity is represented in the varied nationalities of our 17,500 employees.

We have established a corporate university to integrate all internal educational and training processes and whose mission is to “Build and sustain Tenaris’s competitive advantage by capturing, organizing, enriching and transferring knowledge assets”. Training is TenarisUniversity’s core activity, as the Company is deeply committed to strengthening the technical and managerial competencies of its human resources. On average, Tenaris white-collar employees spend more than 65 working hours in class or taking e-learning courses, comparable with best practices in people training. More than 40% of training is in the form of specific technical courses directly related to the job of the employee. Training is continuous throughout the employee’s career. Courses are structured in such a way so as to blend e-learning delivered via the Company’s online learning management system, and classroom teaching, which include off site training, through agreements with universities and external providers, and on site training, which will eventually be delivered at a purpose-built campus.

The primary objective of TenarisUniversity is to align knowledge across the Company, which is done through a Core Program, a comprehensive set of e-learning courses that cover all the Company’s capital processes and functions: Procurement, Production Processes, Quality, Technology, Products, Supply Chain Management, Commercial Front End, Administration & Finance, IT and Human Resources. Technical and managerial skill development is emphasized during the Global Trainee (GT) Program, the Company’s recently renovated young professional program. All newlyhired GTs worldwide gather to participate in a one-month Induction Camp. Intense training then continues throughout the 2-year program, according to the job family.

In late 2005, TenarisUniversity established an Industrial School to manage training at several educational levels in the Company’s industrial and technical areas. The Industrial School will focus on areas such as: Steelmaking, Pipe Rolling and Finishing, Quality, Product Development, and Industrial Management. The establishment of the school constitutes an important step in the Company’s ongoing efforts to strengthen the sense of a common industrial culture.

We are committed to improving the quality of life for those who live in the areas surrounding our plants. Working with local institutions, both public and private, to identify priorities and articulate actions, we help to build and equip schools, finance scholarships that reward academic excellence, sponsor cultural, sports and leisure events, improve medical and sanitation systems and promote employment. Through our community investments, we systematically encourage a connection with public and private organizations and the joint application of knowledge, experience, and best practices.

For example, in Campana, Argentina, we worked together with the municipal and provincial governments to build a new inpatient facility with 39 rooms at the public hospital and formed a partnership with three public welfare organizations and educational authorities to facilitate and ensure primary school education for children from impoverished communities. In Veracruz, Mexico, we took part in a housing program, the purpose of which was to improve the quality of life for families with income levels too low to obtain mortgages. In Bergamo, Italy, we sponsored an exhibition entitled War is Over, in which the Gallery of Modern and Contemporary Art (GAMEC), celebrated the 60^th anniversary of the end of World War II.

Health, safety and environment

Following the introduction of our common Health, Safety and Environment (HSE) Policy, we have been working on the implementation of the integrated HSE management system. The management system is based on the principles of sustainable development and follows the guidelines of international norms such as ISO 14000 and OHSA 18000, applying eco-efficiency and integral safety concepts in the whole system, from the product design and industrial investment up to the

operational and logistic planning and execution. At our mills, we have completed the identification and evaluation of the risk and environmental aspects, developed the management programs and procedures and started the training program, according to the chronogram established and the requirements of the guidelines.

As part of our safety program, we work constantly to improve its safety performance concentrating on two levels. On one, we upgrade the physical conditions of the workplace by continuously investing in new technologies, infrastructure and maintenance. On another, we work on attitudes and behavior relative to safety. We do this through innovative programs that reward safe behavior and by holding weekly meetings with managers, safety staff and workers at each of our plants to discuss accidents and share ideas for improving safety. For the fifth consecutive year, safety indicators have improved and our lost-time accident incident rate declined by 17% over the level of 2004. The cumulative improvement in this indicator over the past five years has been 55%.

For the continuous improvement of our environmental performance, we constantly review our operations and those of our sub-contractors to maximize the efficiency in the use of energy and material resources, the recycling —both at our own facilities and by third parties— of byproducts, and the minimization in the generation of waste, emissions and effluents.

We also participate in programs, collaborating with local institutions in the communities where we operate, in order to contribute to the development of conditions that enhance social inclusiveness. Tenaris is involved in activities related to global environmental issues, like climate change or persistent organic pollutants abatement —among others— mainly through active participation in local and international organizations, such as the International Iron & Steel Institute Environmental Committee, the “Consejo Empresario Argentino para el Desarrollo Sostenible” (local branch of the World Business Council for Sustainable Development) and others.

Double joint flowlines for Dalia

When the USD 3.4 billion (estimated) Dalia deepwater project comes on stream during the second half of 2006, production will move through undersea flowlines comprised of Tenaris double joint pipe installed on the sea floor in water depths of between 1,200 and 1,500 meters. For the project, Tenaris had to qualify and manufacture 8,500 tons of double joint pipe meeting high specification X65 reel-laid pipe requirements on an accelerated time schedule.

Technip, the engineering and construction company in charge of laying Dalia’s undersea pipelines, awarded Tenaris the contract based on our ability to manufacture the more efficient and cost-effective double joint pipe and our reputation for having well trained manufacturing personnel supported by a state-ofthe-art welding laboratory. The use of coated, double-jointed pipe in flowlines for deep and ultradeepwater applications offers significant advantages due to the reduction in on-site coating and weld time, as well as providing a more homogeneous anti-corrosive coating.

Location — 135 km off the coast of Angola
Customer — Technip
Project description — Discovered in 1997, Dalia is expected to process 240,000 barrels of oil daily from 34 production wells, 30 water injection wells and three gas injection wells.

Running TenarisBlue® for Pemex

On January 6, 2006, Tenaris for the first time ran a TenarisBlue® premium connection for the operations of Pemex in Mexico. This followed a series of presentations to the directors and operations personnel of the various regions of Pemex to introduce the advantages of using the new technology, particularly for operations in high pressure, high temperature environments. It is expected that, following this initial use, Pemex will employ the TenarisBlue® connection in many of its operations around Mexico.

Tenaris also provided the running service for the 3 1/2” tubing using pipes delivered from inventory at Reynosa, one of the yards which Tenaris maintains to support its just in-time delivery service to Pemex. By integrating the supply of pipes with premium connections and other accessories, managing inventories and delivering on a justin- time basis according to the actual drilling programs of our customers under long-term agreements, we are reducing costs and risks for our customers, allowing them to concentrate resources on their drilling programs.

Location — Reynosa, Tamaulipas
Customer — Pemex
Project description — Arcos 138 — A 2,800 meter gas well in the Burgos basin which is expected to produce 8 million cubic feet of gas per day when in operation.

Roberto Rocca Education Program

Tenaris is a founder and co-sponsor of the Roberto Rocca Education Program, which was established in 2005 to provide scholarships and fellowships to talented undergraduate and graduate students in selected countries for the study of engineering and the applied sciences. The program’s other sponsors are Ternium and Techint.

Named in honor of Tenaris’s former Chairman, the Program aims to contribute to the development of human resources that can advance science and technology in the following countries: Argentina, Brazil, Italy, Mexico, Romania and Venezuela. The program is founded on the belief that industrial development is critical to economic development.

Around 340 scholarships will be awarded in 2006 to undergraduate students in participating countries for study at more than 30 domestic universities. The Program will also award up to six fellowships to help a select group of students pursue a Ph.D. at a university of their choice outside their country of origin. Key disciplines supported through the scholarships and fellowships include materials science and mechanical, chemical and electrical engineering.

In the coming years the program’s sponsors expect to expand the program by increasing the number of awards in countries where scholarships and fellowships are already granted and extending the initiative to other countries.

Qatar: LNG plants get larger

Tenaris was selected by CTJV, a joint venture of Chiyoda and Technip, to supply a 22,000 ton package of heat treated and non-heat treated pipes used in the construction of the QatarGas II LNG project in Qatar. The USD 12.8 billion project will employ two large liquefaction trains of 7.8 MMTA each.

This followed the award of pipe supply contracts for trains 3 and 4 of the RasGas project in 2004, when the capacity of each train was 4.7 MMTA.

As the risks in large construction projects increase, we are shortening the traditional supply chain to create value and reduce risk for customers by coordinating material planning and expediting services, reserving mill capacity in advance and ensuring on-time delivery of complete material packages at the project site.

Location — Ras Laffan, Qatar
Customer — Chiyoda and Snamprogetti
Project description — The fourth train of the RasGas project, with an annual LNG capacity of 4.7 million tons.

Corporate governance

Tenaris has one class of shares, with each share having equal rights including the entitlement to one vote at our shareholders’ meetings. Our Articles of Association provide that the annual ordinary shareholders’ meeting, which approves the annual financial statements and appoints the board of directors, occur each year on the first Wednesday of June.

Board of directors

Management of Tenaris is vested in a board of directors. Our Articles of Association provide for a board of directors consisting of at least five and at most fifteen directors. The board of directors is required to meet as often as required by the interests of Tenaris and at least four times per year. A majority of the members of the directors present or represented at each board of directors’ meeting constitutes a quorum, and resolutions may be adopted by the vote of a majority of the directors present or represented. In the case of a tie, the chairman is entitled to cast the deciding vote.

Directors are elected at the annual ordinary shareholders’ meeting to serve one-year renewable terms, as decided by the shareholders. The shareholders may dismiss all or any one director at any time, with or without cause, by resolution passed by majority vote, irrespective of the number of shares present or represented at the annual ordinary shareholders’ meeting. In 2005, the board of directors met six times. The annual shareholders’ meeting held on May 25, 2005 approved the appointment of nine directors, three of whom are independent.

Audit committee

Tenaris has an audit committee consisting of three members, all of which are independent directors. The members of the audit committee are not eligible to participate in any incentive compensation plan for employees of the Company or any of its subsidiaries. Under our Articles of Association, as supplemented by the audit committee charter, the audit committee:

§		assists the board of directors in fulfilling its oversight responsibilities relating to the integrity of our financial statements and system of internal controls and the independence and performance of the independent auditors;
§		reviews material transactions between Tenaris and its subsidiaries with related parties to determine whether their terms are consistent with market conditions or are otherwise fair to the Company and its subsidiaries; and
§		performs the other duties entrusted to it by the board of directors, particularly as regards relations with the independent auditors.

The audit committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and has direct access to the independent auditors as well as anyone at Tenaris and, subject to applicable laws, its subsidiaries.

The audit committee is required to report to the board of directors on its activities and the adequacy of the system of internal control. In 2005, the audit committee met five times and on each occasion presented its report to the board of directors.

Auditors

The annual accounts are audited by independent auditors. Auditors are appointed by the shareholders through a resolution passed by a simple majority vote at the annual shareholders’ meeting, irrespective of the number of shares present or represented, on the audit committee’s recommendation. Shareholders may determine the number and the term of office of the auditors, which may not exceed one year. As part of their duties, the auditors report directly to the audit committee.

Price Waterhouse & Co. S.R.L. served as our auditors during the 2005 fiscal year and are proposed for reappointment.

Compensation

The compensation of the members of our board of directors is determined at the annual ordinary shareholders’ meeting. The aggregate compensation earned by our directors and executive officers during 2005 amounted to USD 14.3 million.

Corporate governance standards

Our corporate governance practices are governed by Luxembourg law (particularly the law of August 10, 1915 on commercial companies and the law of July 31, 1929, as amended) and our Articles of Association. As a Luxembourg company listed on the New York Stock Exchange (the “NYSE”), the Bolsa Mexicana de Valores, S.A. de C.V. (the “Mexican Stock Exchange”), the Bolsa de Comercio de Buenos Aires (the “Buenos Aires Stock Exchange”) and Borsa Italiana S.p.A. (the “Italian Stock Exchange”), we are not required to comply with all of the corporate governance listing standards of these exchanges. We, however, believe that our corporate governance practices meet, in all material respects, the corporate governance standards that are generally required for controlled companies by all of the exchanges on which our securities trade.

The following is a summary of the significant ways that our corporate governance practices differ from the corporate governance standards required for controlled companies by the exchanges on which our shares trade. Our corporate governance practices may differ in non-material ways from the standards required by these exchanges that are not detailed here.

Non-management directors’ meetings

Under NYSE standards, non-management directors must meet at regularly scheduled executive sessions without management present and, if such group includes directors who are not independent, a meeting should be scheduled once per year including only independent directors. Neither Luxembourg law nor our Articles of Association require the holding of such meetings and we do not have a set policy for these meetings.

In addition, NYSE-listed companies are required to provide a method for interested parties to communicate directly with the non-management directors as a group. While we do not have such a method, we have set up a compliance line for investors and other interested parties to communicate their concerns directly to the members of our audit committee.

Audit committee

Under NYSE standards, all audit committee members of listed US companies are required to be financially literate or must acquire such financial knowledge within a reasonable period and at least one of its members shall have experience in accounting or financial administration. In addition, if a member of the audit committee is simultaneously a member of the audit committee of more than three public companies, and the listed company does not limit the number of audit committees on which its members may serve, then in each case the board must determine whether the simultaneous service would prevent such member from effectively serving on the listed company’s audit committee and shall publicly disclose its decision. No comparable provisions on audit committee membership exist under Luxembourg law or our Articles of Association. Our board of directors, however, has concluded that the membership of the audit committee as a whole has sufficient recent and relevant financial experience to properly discharge its functions. In addition, the audit committee, from time to time and as it deems necessary, engages persons that meet all of the attributes of a financial expert as consultants.

Standards for evaluating director independence

Under the NYSE standards, the board is required, on a case by case basis, to express an opinion with regard to the independence or lack of independence of each individual director. Neither Luxembourg law nor our Articles of Association requires the board to express such an opinion. In addition, the definition of “independent” under the rules of the exchanges on which our securities are listed differ in some non-material respects from the definition contained in our Articles of Association.

Audit committee responsibilities

Pursuant to our Articles of Association, the audit committee shall assist the board of directors in fulfilling its oversight responsibilities relating to the integrity of our financial statements and system of internal controls and the independence and performance of the independent auditors. The audit committee is required to review material transactions (as defined by our Articles of Association) between us or our subsidiaries with related parties and also perform the other duties entrusted to it by the board. The NYSE requires certain matters to be set forth in the audit committee charter of US listed companies.

Our audit committee charter provides for many of the responsibilities that are expected from such bodies under the NYSE standard; however, due to our equity structure and holding company nature, the charter does not contain all such responsibilities, including provisions related to setting hiring policies for employees or former employees of independent

auditors, discussion of risk assessment and risk management policies, and an annual performance evaluation of the audit committee.

The Mexican Stock Exchange requires the audit committee of listed companies to review and provide advice to the board of directors on certain matters, including transactions that involve the purchase or sale of 10% or more of the listed company’s assets, the grant of guarantees involving liability for more than 30% of the value of the listed company’s assets, and any transaction with a value of more than 1% of the listed company’s assets. This requirement is expected to cease to apply in June 2006. Our audit committee does not serve in this capacity.

Shareholder voting on equity compensation plans

Under NYSE standards, shareholders must be given the opportunity to vote on equity-compensation plans and material revisions thereto, except for employment inducement awards, certain grants, plans and amendments in the context of mergers and acquisitions, and certain specific types of plans. We do not currently offer equity based compensation to our directors, executive officers or employees, and therefore do not have a policy on this matter.

Disclosure of corporate governance guidelines

NYSE-listed companies must adopt and disclose corporate governance guidelines. Neither Luxembourg law nor our Articles of Association require the adoption or disclosure of corporate governance guidelines. Our board of directors follows corporate governance guidelines consistent with our equity structure and holding company nature, but we have not codified them and therefore do not disclose them on our website.

Code of business conduct and ethics

Under NYSE standards, listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. Neither Luxembourg law nor our Articles of Association require the adoption or disclosure of such a code of conduct. We, however, have adopted a code of conduct that applies to all directors, officers and employees that is posted on our website and which complies with the NYSE’s requirements, except that it does not require the disclosure of waivers of the code for directors and officers. In addition, we have adopted a supplementary code of ethics for senior financial officers, which is also posted on our website.

Chief executive officer certification

A chief executive officer of a US company listed on the NYSE must annually certify that he or she is not aware of any violation by the company of NYSE corporate governance standards. In accordance with NYSE rules applicable to foreign private issuers, our chief executive officer is not required to provide the NYSE with this annual compliance certification. However, in accordance with NYSE rules applicable to all listed companies, our chief executive officer must promptly notify the NYSE in writing after any of our executive officers becomes aware of any material noncompliance with any applicable provision of the NYSE’s corporate governance standards. In addition, we must submit an executed written affirmation annually and an interim written affirmation each time a change occurs to the board or the audit committee.

Board of directors

Chairman and Chief Executive Officer		Paolo Rocca
Vice-President Finance		Guillermo Vogel
		Roberto Bonatti
		Carlos Franck
		Bruno Marchettini
		Roberto Monti (*)
		Gianfelice Mario Rocca
		Jaime Serra Puche (*)
		Amadeo Vázquez y Vázquez (*)
Secretary		Cecilia Bilesio

(*) Independent Members of the Audit Committee

Executive officers

Chief Executive Officer		Industrial Coordination Director
Paolo Rocca		Sergio Tosato
Chief Operating Officer Alberto Valsecchi		Planning Director Alberto Iperti
Chief Financial Officer Carlos Condorelli		European Area Manager Vincenzo Crapanzano
Commercial Director Germán Curá		Southern Cone Area Manager Guillermo Noriega
Supply Chain Director Alejandro Lammertyn		Mexican Area Manager Sergio De la Maza
Human Resources Director Marco Radnic		Managing Director, Japanese Operations Marcelo Ramos
Technology Director Carlos San Martín		Managing Director, Welded Pipe Operations Ricardo Soler
Information Technology Director Giancarlo Miglio		Procurement Director Renato Catallini

Consolidated financial
statements for the years
ended December 31, 2005,
2004 and 2003

Operating and financial review

This review of Tenaris’s results of operations and financial condition is based on, and should be read in conjunction with, the audited consolidated financial statements of Tenaris and the related notes included elsewhere in this annual report. It compares Tenaris’s results on a consolidated basis for the fiscal year ended December 31, 2005 with its results for the fiscal year ended December 31, 2004. Tenaris prepares its consolidated financial statements in conformity with International Financial Reporting Standards (IFRS), which differ in certain significant respects from US GAAP and other national accounting standards.

Results of operations

The following table sets forth, for the periods indicated, selected financial data from our consolidated income statement and expresses our operating and other costs and expenses as a percentage of net sales.

SELECTED FINANCIAL DATA (All amounts in USD thousands)
Year ended December 31		2005				%				2004				%				2003				%
Net sales			6,736,197				100.0	%			4,136,063				100.0	%			3,179,652				100.0	%
Cost of sales			(3,942,758	)			(58.5	%)			(2,776,936	)			(67.1	%)			(2,207,827	)			(69.4	%)
Gross profit			2,793,439				41.5	%			1,359,127				32.9	%			971,825				30.6	%
Selling, general and administrative expenses			(842,574	)			(12.5	%)			(672,449	)			(16.3	%)			(566,835	)			(17.8	%)
Other operating income and expenses			(2,419	)			(0.0	%)			126,840				3.1	%			(116,800	)			(3.7	%)
Operating income			1,948,446				28.9	%			813,518				19.7	%			288,190				9.1	%
Financial income (expenses), net			(109,738	)			(1.6	%)			5,802				0.1	%			(29,420	)			(0.9	%)
Income before equity in earnings of associated companies and income tax			1,838,708				27.3	%			819,320				19.8	%			258,770				8.1	%
Equity in earnings of associated companies			117,377				1.7	%			206,037				5.0	%			27,585				0.9	%
Income before income tax			1,956,085				29.0	%			1,025,357				24.8	%			286,355				9.0	%
Income tax			(568,753	)			(8.4	%)			(220,376	)			(5.3	%)			(63,918	)			(2.0	%)
Net income			1,387,332				20.6	%			804,981				19.5	%			222,437				7.0	%
Income attributable to equity holders of the Company			1,277,547				19.0	%			784,703				19.0	%			210,308				6.6	%
Income attributable to minority interest			109,785				1.6	%			20,278				0.5	%			12,129				0.4	%

Numbers in tables may not add due to rounding.

Sales volumes

The following table shows our sales volumes of seamless and welded pipe products.

Sales volume		FY 2005				FY 2004				Increase/(Decrease)
North America			843,000				757,000				11	%
Europe			666,000				679,000				(2	%)
Middle East & Africa			524,000				421,000				24	%
Far East & Oceania			404,000				412,000				(2	%)
South America			433,000				377,000				15	%
Total seamless pipes			2,870,000				2,646,000				8	%
Welded pipes			501,000				316,000				59	%
Total steel pipes			3,371,000				2,963,000				14	%

Sales volume of seamless pipes increased by 8% to 2,870,000 tons in 2005 from 2,646,000 tons in 2004. Demand for our seamless pipe products from oil and gas customers was particularly strong reflecting increased investment in oil and gas exploration and production activity whereas demand from industrial and automotive customers was more constrained.

North America. In North America, demand for our seamless pipe products increased due to higher exploration and production activity in Canada, including steamassisted gravity drainage, or SAGD projects, and increased sales of OCTG products in the US.

Europe. In Europe, the decrease in sales was primarily due to lower sales to industrial customers reflecting a reduction in mill capacity allocation to lower margin industrial products in response to increased demand from the energy sector. Sales of OCTG and line pipe products to oil and gas customers and for process and power plant construction increased.

Middle East & Africa. In the Middle East and Africa, demand increased due to higher oil and gas exploration and production activity in the Middle East, particularly in Saudi Arabia, and higher sales of flowlines and risers for West African deepwater projects.

Far East & Oceania. In the Far East and Oceania, the decrease in sales was primarily due to lower sales of line pipe for process and power plant construction as well as to lower sales to industrial customers in Japan. Sales of OCTG products increased particularly in Indonesia and China.

South America. In South America, demand increased reflecting higher levels of drilling activity in the region, particularly in Venezuela and Ecuador. Sales volume of welded pipe products increased 59% to 501,000 tons in 2005 from 316,000 tons in 2004. This increase reflects substantially higher sales for gas pipeline projects in the Brazilian and Argentine markets.

Sales of electric energy in Italy decreased 3% to 2.9 TWh in 2005 from 3.0 TWh in 2004 and sales of natural gas increased by 44% to 941 million scm in 2005 from 652 million scm in 2004.

Net sales

The following table shows our net sales by business segment for the periods indicated:

(US$ million)

Net sales		2005				2004				Increase/(Decrease)
Seamless pipes			5,124.0				3,273.3				57	%
Welded pipes			845.1				348.1				143	%
Energy			526.4				417.9				26	%
Others			240.7				96.8				149	%
Total			6,736.2				4,136.1				63	%

The following table indicates the distribution of our net sales by business segment for the periods indicated:

Percentage of net sales

Net sales		2005				2004
Seamless pipes			76	%			79	%
Welded pipes			13	%			8	%
Energy			8	%			10	%
Others			4	%			2	%
Total			100	%			100	%

Net sales in 2005 increased 63% compared to 2004, which primarily reflects strong sales growth in our seamless pipes business and a good year for our welded pipes business, but sales of energy and other products also increased. Net sales in 2006 are expected to show further growth led by higher net sales of seamless pipes, partially offset by lower sales of welded pipes.

Net sales of seamless pipes rose by 57%, reflecting strong market demand for our products, particularly for high-end products used in demanding applications. Average selling prices for seamless pipes increased by 44% to USD 1,785 per ton in 2005 from USD 1,237 per ton in 2004.

Net sales of welded pipes, which included USD 60 million in sales of metal structures made by our Brazilian welded pipe subsidiary in 2005 and USD 68 million of such sales in 2004, increased 143% reflecting increased demand from gas pipeline projects in Brazil and Argentina and higher average selling prices.

Net sales of electricity and natural gas to third parties by Dalmine Energie increased by 26% reflecting higher prices for electricity and natural gas and higher sales of natural gas.

Net sales of other goods and services increased 149% due to sales of pre-reduced hot briquetted iron, or HBI, from the plant in Venezuela that we acquired in July 2004 and higher sales of sucker rods used in oil extraction.

Cost of sales

The following table shows our cost of sales, expressed as a percentage of net sales, by business segment for the periods indicated:

(percentage of net sales)

Cost of sales		2005				2004
Seamless pipes			53	%			63	%
Welded pipes			66	%			72	%
Energy			98	%			95	%
Others			63	%			56	%
Total			59	%			67	%

The decrease in cost of sales, expressed as a percentage of net sales, resulted primarily from an improvement of gross margin recorded on the sale of seamless pipe products.

Cost of sales for seamless pipe products, expressed as a percentage of net sales, decreased to 53% in 2005 compared to 63% in 2004 as higher average selling prices offset increased raw material, energy and labor costs and we sold higher volumes of higher margin, high-end products.

Cost of sales for welded pipe products, expressed as a percentage of net sales, decreased to 66% in 2005, compared to 72% in 2004, as higher average selling prices and volume-related efficiencies offset increased raw material prices.

Cost of sales for energy products, expressed as a percentage of net sales, increased to 98% from 95%. The gross margin on our sales of energy products declined during 2005 but is expected to recover partially in 2006.

Cost of sales for other products, expressed as a percentage of net sales, increased primarily due to a first full year of sales of HBI with margins lower than margins on the sale of sucker rods, which represented a larger proportion of sales of other products in 2004.

Selling, general and administrative expenses, or SG&A

SG&A declined as a percentage of net sales to 12.5% in 2005 compared to 16.3% in 2004 but rose in absolute terms to USD 842.6 million compared to USD 672.4 million. SG&A rose in absolute terms due to higher labor costs, higher export and financial transaction taxes and higher commission, freight and other selling expenses. These increases were related primarily to higher activity in terms of net sales and higher salary costs.

Other operating income and expenses

We recorded a loss of USD 2.4 million in 2005, compared to a gain of USD 126.8 million in 2004. The result in 2004 included a gain of USD 123.0 million recorded following the conclusion of an arbitration award, pursuant to which Fintecna, an Italian state-owned company, was required to compensate us for losses incurred in respect of a litigation settled in 2003 with a consortium led by BHP Billiton Petroleum Ltd.

Financial income (expenses), net

Net financial expenses totalled USD 109.7 million in 2005, compared to net financial income of USD 5.8 million in 2004. Net interest expenses decreased to USD 29.2 million compared to USD 32.7 million, as the decrease in the net debt position offset the impact of increases in interest rates. Tenaris recorded a loss of USD 86.6 million on net foreign exchange transactions and changes in the fair value of derivative instruments in 2005, compared to a gain of USD 33.1 million in 2004. These gains and losses on net foreign exchange transactions and the changes in the fair value of derivative instruments are to a large extent offset by changes to our net equity position and arise due to the fact that most of our subsidiaries prepare their financial statements in currencies other than the US dollar in accordance with IFRS.

Equity in earnings of associated companies

Equity in earnings of associated companies generated a gain of USD 117.4 million in 2005, compared to a gain of USD 206.0 million in 2004. These gains were derived mainly from our equity investment in Sidor which was exchanged for an equity investment in Ternium in September 2005. The gain of USD 206.0 million recorded in 2004 included non-recurring gains of USD 135.0 million in respect of the conversion of a subordinated loan into equity and the reversal of an impairment provision.

Income tax charges

Income tax charges of USD 568.8 million were recorded during 2005, equivalent to 31% of income before equity in earnings of associated companies and income tax, compared to income tax charges of USD 220.4 million, equivalent to 27% of income before equity in earnings of associated companies and income tax, during 2004.

Income tax charges in 2004, expressed as a percentage of income before equity in earnings of associated companies and income tax, were positively impacted by receipt of other operating income which was not subject to income tax. Excluding such non-recurring untaxed income, income tax charges in 2004 would have been equivalent to 32% of income before equity in earnings of associated companies and income tax.

Net income

Net income rose to USD 1,387.3 million in 2005 compared to USD 805.0 million in 2004. Net income in 2004 included a one-time gain of USD 123.0 million in respect of the Fintecna arbitration award and nonrecurring income of USD 135.0 million in respect of our equity investment in Sidor. Excluding these gains from the 2004 results, net income rose 154% reflecting increased operating income.

Income attributable to equity holders of the Company

Income attributable to equity holders of the Company rose to USD 1,277.5 million in 2005, compared to USD 784.7 million in 2004 reflecting the improvement in net income partially offset by the increase in income attributable to minority interest.

Income attributable to minority interest

Income attributable to minority interest rose to USD 109.8 million in 2005, compared to USD 20.3 million in 2004 reflecting an improvement in operating and financial results at Confab, our Brazilian welded pipe manufacturing subsidiary in which minority interests hold 61% of the total shares and NKKTubes, our Japanese seamless pipe manufacturing subsidiary in which minority interests hold 49% of the shares.

Liquidity and capital resources

Our financing strategy is to maintain adequate financial resources and access to additional liquidity. During 2005, cash flows from operations provided the principal source of funding but we also rolled over some of our short-term borrowing and substituted some short-term borrowing with loans of longer maturity.

We believe that funds from operations, availability of liquid financial assets and our access to external borrowing will be sufficient to satisfy our working capital needs and to service our debt in the foreseeable future. We also believe that our liquidity and capital resources give us adequate flexibility to manage our planned capital spending programs and to address short-term changes in business conditions.

We have a conservative approach to the management of our liquidity, which consists of cash and cash equivalents, which include highly liquid short-term investments. We primarily used these funds to finance our working capital and capital expenditure requirements, to make acquisitions and to distribute dividends to our shareholders.

We hold money market investments and variable-rate or fixed-rate securities from investment grade issuers.

We concentrate our cash in major financial centers (mainly New York and London). We hold our cash and cash equivalents primarily in US dollars, and limit our holdings of other currencies to the minimum required to fund our cash operating needs. As of December 31, 2005 US dollar denominated liquid assets represented 83% of total liquid financial assets. Liquid financial assets as a whole (excluding current investments) were 10.5% of total assets compared to 5.5% at the end of 2004. For further information on our liquidity, please see Note 19 to the consolidated financial statements included elsewhere in this annual report.

Historical cash flows

The following table shows our summary cash flows for the last three years:

		For the year ended December 31,
Thousands of U.S. dollars		2005				2004				2003
Net cash provided by operating activities			1,295,323				98,288				275,636
Net cash used in investing activities			(292,791	)			(199,896	)			(252,245	)
Net cash provided by (used in) financing activities			(604,129	)			165,010				(83,182	)
Increase (decrease) in cash and cash equivalents			398,403				63,402				(59,791	)
Effect of exchange rate changes			(11,636	)			343				3,089
Cash and cash equivalents at the beginning of period			293,824				247,834				304,536
Cash and cash equivalents at the end of period			680,591				311,579				247,834

Operating activities

Net cash provided by operations during 2005 increased significantly to USD 1,295.3 million compared to USD 98.3 million in 2004 reflecting the strong increase in operating income to USD 1,948.4 million in 2005 from USD 813.5 million in 2004 and a smaller increase in working capital which increased by USD 433.9 million in 2005 compared to USD 621.2 million in 2004.

The working capital increase was comprised mainly of:

§		an increase in inventories of USD 101.1 million, reflecting primarily an increase in business activity and an increase in the cost of goods in process;
§		a net increase in trade receivables of USD 387.2 million, reflecting higher quarterly net sales, partially offset by an increase in trade payables of USD 32.6 million.

Additionally, the net sum of USD 66.6 million was received in respect of the Fintecna arbitration award net of the third and final installment paid towards the consortium led by BHP Billiton Petroleum Ltd. in respect of the litigation settlement, compared to a net sum of USD 113.8 million paid in 2004.

Investing activities

Net cash used in investing activities in 2005 was USD 292.8 million, compared to USD 213.4 million in 2004. The main differences were as follows:

	§		Capital expenditure increased to USD 284.5 million in 2005 compared to USD 183.3 million in 2004 due primarily to investment in the construction of a power generation plant in Italy and the start towards the end of the year of an investment program to increase capacity to produce high-end products. Capital expenditure is expected to show a further significant increase in 2006 as the construction of the power plant and the investment program advance.
	§		We spent USD 48.3 million in acquisitions in 2005, including the acquisition of a controlling interest in S.C. Donasid S.A., a Romanian steel producer for USD 47.9 million, compared to USD 97.6 million in 2004.
	§		We received distributions of USD 59.1 million on our indirect investments in Sidor in 2005, out of which proceeds we extended convertible loans to Ternium which amounted to USD 40.4 million including accrued interest at December 31, 2005, compared to USD 48.6 million in 2004. On February 1, 2006, pursuant to Ternium’s IPO these convertible loans were converted into a 20,252,338 shares of Ternium.

Financing activities

Net cash used in financing activities, including dividends paid and proceeds and repayments of borrowings, was USD 604.1 million in 2005, compared to net cash provided by financing activities in 2004 of USD 170.6 million. We decreased borrowings by USD 240.4 million in 2005 compared to an increase of USD 305.6 million in 2004 and we increased dividends paid to USD 349.4 million in 2005 from USD 135.1 million in 2004. Dividends paid in 2005 included USD 149.9 million distributed as an interim dividend with respect to the annual dividend to be approved by the shareholders’ meeting in respect of the 2005 fiscal year.

Principal sources of funding

§

Financial liabilities

Total financial debt decreased by USD 249.0 million to USD 1,010.3 million from USD 1,259.3 million at December 31, 2004.

Our financial liabilities consist of bank loans, overdrafts, and financial leases. These facilities are mainly denominated in US dollars and Euros. As of December 31, 2005 US dollar-denominated financial liabilities and Eurodenominated financial liabilities represented 68% and 21%, respectively, of total financial liabilities; in addition, a substantial proportion of our financial liabilities denominated in other currencies are swapped to the US dollar. For further information about our financial liabilities, please see Note 20 to our consolidated financial statements.

The average interest rates shown below were calculated using the rates set for each instrument in its corresponding currency and weighted using the dollar-equivalent outstanding principal amount of said instruments.

		2005				2004
Bank borrowings			5.14	%			3.89	%
Debentures and other loans			4.51	%			3.48	%
Finance lease liabilities			3.14	%			2.99	%

The maturity of our financial liabilities is as follows:

		1 year				1 – 2				2 – 3				3 – 4				4 – 5				Over 5
At December 31, 2005		or less				years				years				Years				years				Years				Total
Financial leases			1,502				1,184				970				739				678				1,854				6,927
Other borrowings			330,678				155,337				207,708				159,343				87,843				62,456				1,003,365
Total borrowings			332,180				156,521				208,678				160,082				88,521				64,310				1,010,292

Tenaris’s current debt to total debt ratio decreased from 0.67 as of December 31, 2004 to 0.33 as of December 31 2005 due to the substitution of short-term debt through the issuance of USD 497 million in syndicated loans.

§

Principal borrowings

Significant borrowings include:

	§		USD 300.0 million syndicated loan issued by Tamsa in March, 2005, maturing in March, 2010.
	§		USD 125.0 million syndicated loan issued by Siderca in April, 2005, maturing in April, 2008.
	§		USD 144.0 million syndicated loan granted to Dalmine in June 2005, of which USD 72.0 million had been disbursed as of December 31, 2005.

The main financial covenants related to these loan agreements are commitments not to incur in additional indebtedness above agreed limits or pledges of certain assets, and compliance with certain financial ratios as calculated on each company’s financial statements.

Additionally, Tenaris’s total borrowings include USD 204.8 million secured by certain properties of Dalmine and Confab.

As of December 31, 2005, Tenaris was in compliance with all of its financial covenants. Management believes that current debt covenants allow the Company a high degree of operational and financial flexibility and do not impair its ability to obtain additional financing at competitive costs.

Price Waterhouse & Co. S.R.L.
Bouchard 557, piso 7º
C1106ABG - Ciudad de Buenos Aires
Tel.: (54-11) 4850-0000
Fax: (54-11) 4850-1800

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
Tenaris S.A.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of cash flows and of changes in equity present fairly, in all material respects, the financial position of Tenaris S.A. and its subsidiaries at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with International Financial Reporting Standards. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

International Financial Reporting Standards vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Notes 32 and 33 to the consolidated financial statements.

Buenos Aires, Argentina
March 1, 2006 except as to Notes 32 and 33
which is as of April 7, 2006

Price Waterhouse & Co. S.R.L.
by
Daniel A. López Lado
(Partner)

Consolidated income statements

TENARIS S.A.
Consolidated financial statements
for the years ended December 31,
2005, 2004 and 2003.

						Year ended December 31,
(all amounts in thousands of U.S. dollars, unless otherwise stated)		Notes				2005				2004				2003
Net sales			1				6,736,197				4,136,063				3,179,652
Cost of sales			2				(3,942,758	)			(2,776,936	)			(2,207,827	)
Gross profit							2,793,439				1,359,127				971,825
Selling, general and administrative expense			3				(842,574	)			(672,449	)			(566,835	)
Other operating income			5 (i)				11,986				152,591				8,859
Other operating expense		5 (ii)					(14,405	)			(25,751	)			(125,659	)
Operating income							1,948,446				813,518				288,190
Financial income (expense), net			6				(109,738	)			5,802				(29,420	)
Income before equity in earnings of associated companies and income tax							1,838,708				819,320				258,770
Equity in earnings of associated companies			7				117,377				206,037				27,585
Income before income tax							1,956,085				1,025,357				286,355
Income tax			8				(568,753	)			(220,376	)			(63,918	)
Income for the year (1)							1,387,332				804,981				222,437
Income for the year attributable to (1):
Equity holders of the Company							1,277,547				784,703				210,308
Minority interest							109,785				20,278				12,129
							1,387,332				804,981				222,437
Earnings per share attributable to equity holders of the Company (1)
Weighted average number of ordinary shares outstanding (in thousands)			9				1,180,537				1,180,507				1,167,230
Earnings per share (U.S. dollars per share)			9				1.08				0.66				0.18
Earnings per ADS (U.S. dollars per ADS)			9				10.82				6.65				1.80

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated balance sheets

						At December 31,								At December 31,
(all amounts in thousands of U.S. dollars)						2005								2004
		Notes
ASSETS
Non-current assets
Property, plant and equipment, net			10				2,230,038								2,164,601
Intangible assets, net			11				159,099								49,211
Investments in associated companies			12				257,234								99,451
Other investments			13				25,647								24,395
Deferred tax assets			21				194,874								161,173
Receivables			14				65,852				2,932,744				151,365				2,650,196
Current assets
Inventories			15				1,376,113								1,269,470
Receivables and prepayments			16				143,282								279,450
Current tax assets			17				102,455								94,996
Trade receivables			18				1,324,171								936,931
Other investments			19 (i)				119,907								119,666
Cash and cash equivalents		19 (ii)					707,356				3,773,284				311,579				3,012,092
Total assets											6,706,028								5,662,288
EQUITY AND LIABILITIES (Section IV. (a))
Capital and reserves attributable to the Company’s equity holders
Share capital							1,180,537								1,180,537
Legal reserves							118,054								118,054
Share premium							609,733								609,733
Other distributable reserve							—								82
Currency translation adjustments							(59,743	)							(30,020	)
Other reserves							2,718								—
Retained earnings							1,656,503				3,507,802				617,538				2,495,924
Minority interest											268,071								165,271
Total equity											3,775,873								2,661,195
LIABILITIES
Non-current liabilities
Borrowings			20				678,112								420,751
Deferred tax liabilities			21				353,395								371,975
Other liabilities			22 (i)				154,378								172,442
Provisions		23 (ii)					43,964								31,776
Trade payables							1,205				1,231,054				4,303				1,001,247
Current liabilities
Borrowings			20				332,180								838,591
Current tax liabilities							452,534								222,735
Other liabilities		22 (ii)					138,875								194,945
Provisions		24 (ii)					36,945								42,636
Customer advances							113,243								108,847
Trade payables							625,324				1,699,101				592,092				1,999,846
Total liabilities											2,930,155								3,001,093
Total equity and liabilities											6,706,028								5,662,288

Contingencies, commitments and restrictions to the distribution of profits are disclosed in Note 26.

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements Of Changes In Equity

(all amounts in thousands of U.S. dollars)

		Attributable to equity holders of the Company																												Minority
														Other				Currency												Interest
		Share				Legal				Share				Distributable				translation				Other				Retained				(see Section
		Capital				Reserves				Premium				Reserve (*)				adjustment				Reserves				Earnings (*)				IV. (a))				Total
Balance at January 1, 2005			1,180,537				118,054				609,733				82				(30,020	)			—				617,538				165,271				2,661,195
Effect of adopting IFRS 3 (see Section IV.)			—				—				—				—				—				—				110,775				—				110,775
Adjusted balance at January 1, 2005			1,180,537				118,054				609,733				82				(30,020	)			—				728,313				165,271				2,771,970
Currency translation differences			—				—				—				—				(29,723	)			—				—				7,180				(22,543	)
Increase in equity reserves in Ternium (see Note 28)																							2,718												2,718
Acquisition of minority interest			—				—				—				—				—				—				—				153				153
Dividends paid in cash			—				—				—				(82	)			—				—				(349,357	)			(14,318	)			(363,757	)
Income for the year			—				—				—				—				—				—				1,277,547				109,785				1,387,332
Balance at December 31, 2005			1,180,537				118,054				609,733				—				(59,743	)			2,718				1,656,503				268,071				3,775,873

(*) The Distributable Reserve and Retained Earnings calculated according to Luxembourg Law are disclosed in Note 26 (v).

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statement Of Changes In Equity (Cont’d.)

(all amounts in thousands of U.S. dollars)

		Attributable to equity holders of the Company
														Other				Currency
		Share				Legal								Distributable				translation				Retained				Minority Interest
		Capital				Reserves				Share Premium				Reserve				adjustments				Earnings				(see Section IV. (a))				Total
Balance at January 1, 2004			1,180,288				118,029				609,269				96,555				(34,194	)			(128,667	)			119,984				1,961,264
Currency translation differences			—				—				—				—				4,174				—				9,478				13,652
Capital Increase and acquisition of minority interest			249				25				464				82				—				—				20,457				21,277
Dividends paid in cash			—				—				—				(96,555	)			—				(38,498	)			(4,926	)			(139,979	)
Income for the year			—				—				—				—				—				784,703				20,278				804,981
Balance at December 31, 2004			1,180,537				118,054				609,733				82				(30,020	)			617,538				165,271				2,661,195

		Attributable to equity holders of the Company
														Other				Currency
		Share				Legal								Distributable				translation				Retained				Minority Interest
		Capital				Reserves				Share Premium				Reserve				adjustments				Earnings				(see Section IV. (a))				Total
Balance at January 1, 2003			1,160,701				116,070				587,493				206,744				(34,503	)			(342,451	)			186,783				1,880,837
Currency translation differences			—				—				—				—				309				—				16,738				17,047
Capital Increase, exchange transaction and acquisition of minority interest			19,587				1,959				21,776				4,813				—				3,476				(81,602	)			(29,991	)
Dividends paid			—				—				—				(115,002	)			—				—				(14,064	)			(129,066	)
Income for the year			—				—				—				—				—				210,308				12,129				222,437
Balance at December 31, 2003			1,180,288				118,029				609,269				96,555				(34,194	)			(128,667	)			119,984				1,961,264

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Cash Flow Statements

						Year ended December 31,
(all amounts in thousands of U.S. dollars)						2005				2004				2003
Cash flows from operating activities
Income for the year							1,387,332				804,981				222,437
Adjustments for:
Depreciation and amortization			10 & 11				214,227				208,119				199,799
Income tax accruals less payments		30 (ii)					149,487				44,659				(138,570	)
Equity in earnings of associated companies			7				(117,377	)			(206,037	)			(27,585	)
Interest accruals less payments, net		30 (iii)					1,919				16,973				(3,032	)
Power plant impairment		26 (iv)(d)					—				11,705				—
Changes in provisions			23 & 24				6,497				11,455				(13	)
Result from disposition of investments in associated companies							—				—				(1,018	)
Proceeds from Fintecna arbitration award net of BHP settlement			26 (i)				66,594				(126,126	)			114,182
Changes in working capital (1)			30 (i)				(433,939	)			(621,187	)			(107,156	)
Other, including currency translation adjustment							20,583				(46,254	)			16,592
Net cash provided by operating activities							1,295,323				98,288				275,636
Cash flows from investing activities
Capital expenditures			10 & 11				(284,474	)			(183,312	)			(162,624	)
Acquisitions of subsidiaries			28 (a)				(48,292	)			(97,595	)			(65,283	)
Convertible loan to associated companies			28 (d)				(40,358	)			—				(31,128	)
Proceeds from disposal of property, plant and equipment and intangible assets							9,995				12,054				5,965
Proceeds from sales of investments in associated companies							—				—				1,124
Dividends and distributions received from associated companies			12				59,127				48,598				—
Changes in restricted bank deposits							11,452				(13,500	)			—
Investments in short term securities							(119,907	)			—				—
Reimbursement from trust funds							119,666				20,359				—
Acquisitions of minority interest							—				—				(299	)
Net cash used in investing activities							(292,791	)			(213,396	)			(252,245	)
Cash flows from financing activities
Dividends paid							(349,439	)			(135,053	)			(115,002	)
Dividends paid to minority interest in subsidiaries							(14,318	)			(31	)			(14,064	)
Proceeds from borrowings							1,222,861				632,095				552,446
Repayments of borrowings							(1,463,233	)			(326,453	)			(506,717	)
Net cash (used in) provided by financing activities							(604,129	)			170,558				(83,337	)
Increase (decrease) in cash and cash equivalents							398,403				55,450				(59,946	)
Movement in cash and cash equivalents
At beginning of the year							293,824				238,030				294,887
Effect of exchange rate changes							(11,636	)			344				3,089
Increase in cash and cash equivalents							398,403				55,450				(59,946	)
At December 31,							680,591				293,824				238,030
Non-cash financing activities:
Fair value adjustment of minority interest acquired							—				—				(925	)
Common stock issued in acquisition of minority interest							—				820				51,611
Conversion of debt to equity in subsidiaries							—				13,072				—