CSC — AGM Information 2014

Jul 22, 2014

China Steel Corporation Annual General Meeting June 18, 2014

Reports and Discussion

• (1) Report proposal: adoption of the 2013 Business Report and Financial Statements.

• (2) Report proposal: adoption of the Proposal for Distribution of 2013 Profits.

• (3) Discussion proposal: a new share issue through capitalization of earnings of 2013.

• (4) Discussion proposal: amendments to Articles of Incorporation.

• (5) Discussion proposal: amendments to Procedures for Acquisition or Disposal of Assets.

• (6) Proposal of release the prohibition on Chairman, Mr. Jo-Chi, Tsou from holding the position of Director of China Ecotek Corporation.

• (7) Proposal of release the prohibition on Director, Mr. Jyh-Yuh, Sung from holding the position of Director of Chung-Hung Steel Corporation.

• (8) Proposal of release the prohibition on Director, Mr. Horng-Nan, Lin from holding the positions of Chairman of China Ecotek Corporation and Director of Formosa Ha Tinh Steel Corporation.

• (9) Proposal of release the prohibition on Director, Mr. Jih-Gang, Liu from holding the positions of Director of Chung-Hung Steel Corporation, CSC Steel Holdings Bhd., CSC Steel Sdn. Bhd., and East Asia United Steel Corporation.

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Agenda 1-proposed by the board of directors

Explanatory Note:

To adopt the report proposal of 2013 Business Report and Financial Statements.

Please refer to Attachment 1 for the financial statements for the year ended December 31[st] , 2013.

Resolution:

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Agenda 2-proposed by the board of directors

Explanatory Note:

To adopt the report proposal for Distribution of 2013 Profits

1. The Corporation’s earnings distribution, as shown below, is proposed in accordance with the provisions in Article 6 of the Corporation’s Articles of Incorporation:

Incorporation:
Undistributed earnings from previous years Financial Statement adjustments from reconciliation to TIFRS, 2013/1/1 Deduct: Transfer of TIFRS adjustment to special reserve on first adoption of TIFRS, 2013/1/1 Adjusted retained earnings on the first day of TIFRS adoption, 2013/1/1 Reverse of special reserve: disposal of fixed assets Actuarial gains(losses) from defined benefit pension plans (included in retained earnings) Cumulative effects resulting from long-term equity investment Add: After-tax earnings of 2013 (A) Deduct: Legal reserve = (A) *10% Deduct: Provision of special reserve Subtotal of distributable earnings Distribution Items: Dividends for preferred shares Dividends for common shares Subtotal of distribution items Undistributed earnings	21,828,095,765.00 (21,633,289,998.00)	NT$ 15,953,276.38 194,805,767.00 1,616,361.00 140,182,196.00 14,141,777.00 15,981,539,979.48 (1,598,153,998.00) (166,266,135.00)
	(53,575,200.00) (13,883,025,562.00)
		14,583,819,223.86
		(13,936,600,762.00)
		NT$647,218,461.86
Compensation for the Board of Directors and Supervisors Employee Bonus		NT$ 21,245,317.00 1,133,083,571.00

1. For year 2013, Compensation for the Board of Directors and Supervisors totaled NT$21,245,317, and Employee Bonus totaled NT$1,133,083,571 to be distributed entirely in cash.

2. The proposed dividend appropriation for preferred shares totaled NT$1.4 per

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share, consisting of cash dividend of NT$ 1.2 and stock dividend of NT$0.2 per share. The proposed dividend appropriation for common shares totaled NT$0.9 per share, consisting of cash dividend of NT$0.7 and stock dividend of NT$0.2 per share.

1. Upon approval of this earnings appropriation plan by resolution of the meeting of shareholders, Chairman of the Board will be authorized to set the record date for cash dividend distribution. When distributing cash dividends, the total amount paid to each shareholder shall be in whole NT dollars and any fractional amount less than a NT dollar shall be rounded to the next NT dollar. The resulting difference shall be recognized as a Company expense.

Resolution:

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Agenda 3-proposed by the board of directors

Explanatory Note:

To discuss a new share issue through capitalization of NT$ 3,092,770,390 (issue of 309,277,039 common shares) from earnings available for distribution in 2013.

1. For the meet the Corporation’s needs for operating capital , it is proposed that NT$ 3,092,770,390 be appropriated from earnings available for distribution in 2013 toward an increase in equity capital by issuing 309,277,039 common shares, with a par value of 10 per share, in a single stock offering. The rights and obligations of the new common shares are the same as existing common shares.

2. Of this equity capital increase from earnings available for distribution, stock dividend is appropriated free-of-charge to shareholders in our Shareholder Register on the dividend record date in accordance with their respective shareholding percentages. The distribution shall be 20 shares for every 1,000 shares of both preferred stock and common stock. Fractional shares may be combined into one whole share by the shareholders; otherwise, pro rata cash payments shall be made for fractional shares not combined into one whole share based on its par value. Residual amounts less than one NT dollar shall be rounded to the next dollar and the difference shall be recognized as a Company expense. Chairman of the Board is authorized to determine the disposal of cumulative fractional shares.

Resolution:

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Agenda 4 -proposed by the board of directors

Explanatory note:

Amendments to the Corporation’s Articles of Incorporation are proposed. A comparison table of drafted clause and the clause in force is attached.

Resolution:

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Attachment 2

Comparison Table of Drafted Amendments to Articles of Incorporation of China Steel Corporation

Corporation
Revised clause	Clause in force	Explanation
Article 6. In case of any earnings earned in any given fiscal year being reported from the Company’s final annual accounting, a preferred share dividend shall be distributed at 14% of the par value firstly after taxes, losses and legal reserves have been paid, made up and set aside respectively. The remaining earnings if have, shall be set aside 0.15% as remuneration for Directors and Supervisors, 8% as bonuses for employees, and 14%of the par value as bonuses for common shares. In case the account still remains any distributable earnings, additional bonuses shall be distributed according to the percentage of shares held by each shareholder of preferred and common shares. When necessary, however, upon a resolution by a shareholders’ meeting, special reserved earnings surplus or retained earnings may be set aside first after distribution of dividends for preferred shares. In case of no earnings in a given year or in the event that the earnings are insufficient to cover the	Article 6. In case of any earnings earned in any given fiscal year being reported from the Company’s final annual accounting, a preferred share dividend shall be distributed at 14% of the par value firstly after taxes, losses and legal reserves have been paid, made up and set aside respectively. The remaining earnings if have, shall be set aside 0.15% as remuneration for Directors and Supervisors, 8% as bonuses for employees, and 14%of the par value as bonuses for common shares. In case the account still remains any distributable earnings, additional bonuses shall be distributed according to the percentage of shares held by each shareholder of preferred and common shares. When necessary, however, upon a resolution by a shareholders’ meeting, special reserved earnings surplus or retained earnings may be set aside first after distribution of dividends for preferred shares. In case of no earnings in a given year or in the event that the earnings are insufficient to cover the	1. Paragraph 1 is amended as regulated by Financial Supervisory Commission. The Company shall amend related regulations on the provision or reversal of special reserved earnings surplus. 2. No amendments are made for other paragraphs.

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distribution of dividends for distribution of dividends for preferred shares, the outstanding preferred shares, the outstanding dividends for distributable dividends for distributable preferred shares shall accrue and preferred shares shall accrue and be made up firstly when there are be made up firstly when there are earnings in any subsequent year. earnings in any subsequent year.

When distributing the annual earnings, the Company may consider the financial status and other operational factors of the Company, and may thereby allocate partial or all of the reserves provided in accordance with laws or regulations stipulated by competent authorities. The Company’s business life The Company ’ s business life cycle is in the stage of steady cycle is in the stage of steady growth. Pursuant to the growth. Pursuant to the distribution of the dividends and distribution of the dividends and shareholders’ bonuses provided shareholders’ bonuses provided in the preceding paragraph, cash in the preceding paragraph, cash distributed shall be no less than distributed shall be no less than 75% and shares distributed no 75% and shares distributed no more than 25%. more than 25%. The priority and proportions for The priority and proportions for distributing the remaining distributing the remaining company properties for preferred company properties for preferred shares shall be the same as those shares shall be the same as those for common shares. for common shares. Shareholders of preferred shares Shareholders of preferred shares shall have no right to vote for shall have no right to vote for members of the Boards of members of the Boards of Directors and Supervisors, and Directors and Supervisors, and their other rights and obligations their other rights and obligations shall be the same as those of shall be the same as those of

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shareholders of common shares. Preferred shares issued by the Company may be redeemable. Shareholders of preferred shares may request a conversion of preferred shares into common shares.	shareholders of common shares. Preferred shares issued by the Company may be redeemable. Shareholders of preferred shares may request a conversion of preferred shares into common shares.
Article 42. This Articles of Incorporation are agreed and signed on Nov. 2, 1971, firstly amended on Dec. 28, 1973, secondly amended on Jun. 25, 1974, thirdly amended on Oct. 5, 1974, fourthly amended on Jun. 28, 1975, fifthly amended on Jun. 6, 1976, sixthly amended on Jun. 25, 1977, seventhly amended on Oct. 14, 1978, eighthly amended on Oct. 20, 1977, ninthly amended on Sep. 20, 1980, tenthly amended on Sep. 26, 1981, eleventh amended on Nov. 20, 1982, twelfth amended on Sep. 22, 1984, thirteenth amended on Feb. 16, 1985, fourteenth amended on Nov. 23, 1985, fifteenth amended on Dec. 20, 1986, sixteenth amended on Sep. 17, 1988, eighteenth amended on Sep. 27, 1990, nineteenth amended on Sep. 26, 1991, twentieth amended on Sep. 25, 1992, twenty-firstly amended on Sep. 24, 1993, twenty-secondly amended on Sep. 22, 1994, twenty-thirdly amended on May 26, 1995, twenty-fourthly amended on Oct. 20, 1995, twenty-fifthly amended on Nov. 6, 1996, twenty-sixthly amended on Dec. 30, 1997, twenty-seventhly amended on Apr. 30, 1999, twenty-eighthly amended on Jun. 8, 2000,	Article 42. This Articles of Incorporation are agreed and signed on Nov. 2, 1971, firstly amended on Dec. 28, 1973, secondly amended on Jun. 25, 1974, thirdly amended on Oct. 5, 1974, fourthly amended on Jun. 28, 1975, fifthly amended on Jun. 6, 1976, sixthly amended on Jun. 25, 1977, seventhly amended on Oct. 14, 1978, eighthly amended on Oct. 20, 1977, ninthly amended on Sep. 20, 1980, tenthly amended on Sep. 26, 1981, eleventh amended on Nov. 20, 1982, twelfth amended on Sep. 22, 1984, thirteenth amended on Feb. 16, 1985, fourteenth amended on Nov. 23, 1985, fifteenth amended on Dec. 20, 1986, sixteenth amended on Sep. 17, 1988, eighteenth amended on Sep. 27, 1990, nineteenth amended on Sep. 26, 1991, twentieth amended on Sep. 25, 1992, twenty-firstly amended on Sep. 24, 1993, twenty-secondly amended on Sep. 22, 1994, twenty-thirdly amended on May 26, 1995, twenty-fourthly amended on Oct. 20, 1995, twenty-fifthly amended on Nov. 6, 1996, twenty-sixthly amended on Dec. 30, 1997, twenty-seventhly amended on Apr. 30, 1999, twenty-eighthly amended on Jun. 8, 2000,	To revise the date of amendment and cardinal number.

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twenty-ninthly amended on May 31, 2001, thirtieth amended on Jun. 20, 2002, thirty-firstly amended on Jun. 18, 2003, thirty-secondly amended on Jun. 17, 2004, thirty-thirdly amended on Jun. 14, 2005, thirty-fourthly amended on Jun. 15, 2006, thirty-fifthly amended on Jun. 21, 2007, thirty-sixthly amended on Jun. 19, 2008, thirty-seventhly amended on Jun. 19, 2009,thirty-eighthly amended on June 23, 2010, thirty-ninthly amended on June 15, 2011, fortieth amended on June 15, 2012, forty-firstly amended on June 19[th] , 2013, and - forty secondly amended on June 18[th] , 2014.

twenty-ninthly amended on May 31, 2001, thirtieth amended on Jun. 20, 2002, thirty-firstly amended on Jun. 18, 2003, thirty-secondly amended on Jun. 17, 2004, thirty-thirdly amended on Jun. 14, 2005, thirty-fourthly amended on Jun. 15, 2006, thirty-fifthly amended on Jun. 21, 2007, thirty-sixthly amended on Jun. 19, 2008, thirty-seventhly amended on Jun. 19, 2009,thirty-eighthly amended on June 23, 2010, thirty-ninthly amended on June 15, 2011, fortieth amended on June 15[th] , 2012, and forty-firstly amended on June 19[th] , 2013.

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Agenda 5 -proposed by the board of directors

Explanatory note:

Amendments to the Procedures for Acquisition or Disposal of Assets are proposed. Amendments are made in compliance with “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the Financial Supervisory Commission dated December 30[th] 2013.

A comparison table of drafted clause and the clause in force is attached.

Resolution:

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Attachment 3

Comparison Table of Drafted Amendments to Procedures for Loaning of Funds to Other Parties of China Steel Corporation

Revised clause	Clause in force	Clause in force	Explanation
Article 1 The Procedures for Acquisition or Disposal of Assets (hereinafter “the Procedures”) of China Steel Corporation (hereinafter “the Corporation”) are adopted in accordance with the provisions of the Article 6, Paragraph 1 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” (hereinafter“the Regulations”) regulated by Financial Supervisory Commission (hereinafter “FSC”)	Article 1 The Procedures for Acquisition or Disposal of Assets (hereinafter “the Procedures”) of China Steel Corporation (hereinafter “the Corporation”) are adopted in accordance with the provisions of the Article 6, Paragraph 1 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” (hereinafter“the Regulations”) regulated by Financial Supervisory Commission,Executive Yuan (hereinafter“FSC”)		Text revision to reflect the organizational change of the Financial Supervisory Commission (the FSC), Executive Yuan starting July 1st, 2012.
Article 2 (Omitted) 2. Real property(including land, houses and buildings, investment property, and rights to use land) and equipment. (Omitted)	Article 2 (Omitted) 2. Real property assets. (Omitted)	and other fixed	Subparagraph 2 is amended in accordance with the change of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated bythe FSC.
Article 3 (Omitted) 2. "Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with acts of law": Refers to assets acquired or	Article 3 (Omitted) 2. "Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with acts of law": Refers to assets acquired or		Text revised in subparagraph 2 due to change in Article 156 of the Company Act.

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	disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act or other acts, or to transfer of shares from any other company through issuance of new shares of its own as the consideration thereof (hereinafter "transfer of shares") under Article 156, paragraph8 of the Company Act. 3. "Related party": As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. "Subsidiary": As defined inthe Regulations Governing the Preparation of Financial Reports by Securities Issuers. 5. "Professional appraiser": Refers to a real property appraiser or any other person duly authorized by an act of law to engage in the value appraisal of real property or equipment. (Omitted)		disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act or other acts, or to transfer of shares from any other company through issuance of new shares of its own as the consideration thereof (hereinafter "transfer of shares") under Article 156, paragraph6 of the Company Act. 3. "Related party": As defined in Statement of Financial Accounting Standards No. 6 published by the ROC Accounting Research and Development Foundation (hereinafter"ARDF"). 4. "Subsidiary": As defined in Statements of Financial Accounting Standards Nos. 5 and 7 published by the ARDF. 5. "Professional appraiser": Refers to a real property appraiser or any other person duly authorized by an act of law to engage in the value appraisal of real property orother fixed assets . (Omitted)	Text revised in subparagraphs 3 and 4 due to the implementation of International Financial Reporting Standards. Subparagraph 5 is amended in accordance with the change of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the FSC.
	Article 6 The Corporation’s acquisition or disposal of assets should be		Article 6 The Corporation’s acquisition or disposal of assets should be

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approved by the levels of authority according to the following provisions which are implemented by the first echelon units in charge, depending the nature of assets in accordance with respective control operations of the relevant trading cycles in internal control system, unless such control operations provided otherwise: 1. Investments of current and non-current financial instruments: (1) Investments for business purposes and disposal of their equities shall be submitted to the meeting of Board of Directors for approval. (2) Executives are fully authorized to acquire or dispose the low-risk investments of financial instruments for the purposes of financial management, including government bonds, corporate bonds, financial bonds, domestic and foreign bond-type funds, domestic and foreign currency-type funds, negotiable deposit certificates, short term commercial papers and banker's acceptances acquired or disposed. (3) For other investments in financial instruments, the amount of each transaction or the cumulative amount of transactions within oneyear reachingNT$200	approved by the levels of authority according to the following provisions which are implemented by the first echelon units in charge, depending the nature of assets in accordance with respective control operations of the relevant trading cycles in internal control system, unless such control operations provided otherwise: 1. Investments of current and non-current financial instruments: (1) Investments for business purposes and disposal of their equities shall be submitted to the meeting of Board of Directors for approval. (2) Executives are fully authorized to acquire or dispose the low-risk investments of financial instruments for the purposes of financial management, including government bonds, corporate bonds, financial bonds, domestic and foreign bond-type funds, domestic and foreign currency-type funds, negotiable deposit certificates, short term commercial papers and banker's acceptances acquired or disposed. (3) For other investments in financial instruments, the amount of each transaction or the cumulative amount of transactions within oneyear reachingNT$200

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million or more shall be submitted to the meeting of Board of Directors for approval. Transactions not reaching NT$200 million are fully handled by the authorized Chairman of the Board or executives and are subsequently reported to the next meeting of Board of Directors for approval and future reference. 2. Real estate andequipment : (1) Acquisition: Except as otherwise stipulated in Article 8, Paragraph 1, Subparagraph 1 and Article 13, those already included in the annual operating budget shall be approved by the President or his authorized executives for handling; those not originally included in the budget or the originally budget to be insufficient shall be approved by the President or his authorized executives for handling after agreed by the meeting of Board of Directors or its authorized levels in charge for reallocating portions from other existing budget categories or increasing the budget. (2) Disposal: Except as otherwise stipulated in Article 8, Paragraph 1, Subparagraph 1, disposal of assets already completed pursuant to the procedures of obsolescence shall be approved by the President or his authorized executives for	million or more shall be submitted to the meeting of Board of Directors for approval. Transactions not reaching NT$200 million are fully handled by the authorized Chairman of the Board or executives and are subsequently reported to the next meeting of Board of Directors for approval and future reference. 2. Real estate andother fixed assets: (1) Acquisition: Except as otherwise stipulated in Article 8, Paragraph 1, Subparagraph 1 and Article 13, those already included in the annual operating budget shall be approved by the President or his authorized executives for handling; those not originally included in the budget or the originally budget to be insufficient shall be approved by the President or his authorized executives for handling after agreed by the meeting of Board of Directors or its authorized levels in charge for reallocating portions from other existing budget categories or increasing the budget. (2) Disposal: Except as otherwise stipulated in Article 8, Paragraph 1, Subparagraph 1, disposal of assets already completed pursuant to the procedures of obsolescence shall be approved by the President or his authorized executives for	Subparagraph 2 is amended in accordance with the amendment of subparagraph 5 of Article 3.

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handling; disposal of assets not completed pursuant to the procedures of obsolescence shall be approved by the President or his authorized levels for handling after agreed by the meeting of Board of Directors or its authorized levels in charge. 3. Other assets: Shall be approved by the President, except as otherwise stipulated in the Company Act, the Business Mergers and Acquisitions Act, other acts, the Corporation’s Articles of Incorporation, and Sections 3 and 4 of this Chapter.	handling; disposal of assets not completed pursuant to the procedures of obsolescence shall be approved by the President or his authorized levels for handling after agreed by the meeting of Board of Directors or its authorized levels in charge. 3. Other assets: Shall be approved by the President, except as otherwise stipulated in the Company Act, the Business Mergers and Acquisitions Act, other acts, the Corporation’s Articles of Incorporation, and Sections 3 and 4 of this Chapter.
Article 8 In acquiring or disposing real property orequipment where the transaction amount reaches NT$300 million or more, the Corporation, unless transacting with a government agency, commissioning others to build on its own land, commissioning others to build on rented land, or acquiring or disposing equipment for operating use, shall obtain an appraisal report before the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: (Omitted) 3. Where theprofessional	Article 8 In acquiring or disposing real property orother fixed assets where the transaction amount reaches NT$300 million or more, the Corporation, unless transacting with a government agency, commissioning others to build on its own land, commissioning others to build on rented land, or acquiring or disposingmachinery equipment for operating use, shall obtain an appraisal report before the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: (Omitted) 3. Where theprofessional	Paragraph 1 and 2 are amended in accordance with the amendment of subparagraph 5 of Article 3. Subparagraph 3 of paragraph 1 is amended in accordance with the change of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the FSC.

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appraiser’s appraisal results exhibit any one of the following circumstances, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount,, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by ROC Accounting Research and Development Foundation (hereinafter "ARDF") and express a specific opinion regarding the reasons for the discrepancy and the fairness of the transaction price:

(Omitted)

While dealing with the acquisition or disposal of real property or equipment not contained in the preceding paragraph, the first-echelon units in charge acquiring or disposing of real property should refer to the declared current value, assessed value and the actual transaction prices of neighboring real properties for setting a transaction price; and the first-echelon units in charge acquiring or disposing of

appraiser’s appraisal results exhibit any one of the following circumstances, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount,, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF and express a specific opinion regarding the reasons for the discrepancy and the fairness of the transaction price:

(Omitted)

While dealing with the acquisition or disposal of real property or other fixed assets not contained in the preceding paragraph, the first-echelon units in charge acquiring or disposing of real property should refer to the declared current value, assessed value and the actual transaction prices of neighboring real properties for setting a transaction price; and the first-echelon units in

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	equipment should refer to past transaction prices experienced by the Corporation or those in the same industry for setting a transaction price, as a reference for levels in authority to estimate the transaction price.		charge acquiring or disposing of other fixed assets should refer to past transaction prices experienced by the Corporation or those in the same industry for setting a transaction price, as a reference for levels in authority to estimate the transactionprice.
	Article 10 Where the Corporation acquires or disposes of memberships or intangible assets and the transaction amount reaches NT$300 million or more,except in transactions with a government agency, the Corporation shall engage a certified public accountant to render an opinion on the reasonableness of the transaction price before the date of occurrence of the event; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.		Article 10 Where the Corporation acquires or disposes of memberships or intangible assets and the transaction amount reaches NT$300 million or more, the Corporation shall engage a certified public accountant to render an opinion on the reasonableness of the transaction price before the date of occurrence of the event; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.	Text is amended in accordance with the changes in Article 11 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the FSC.
	Article 13 When the Corporation intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches NT$300 million or more, except the trading of government bonds or bonds under repurchase and resale agreements, or subscription		Article 13 When the Corporation intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches NT$300 million or more, the Corporation may not proceed to enter into a transaction contract or make a payment until the	As the trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds from related parties involves lower risk, waiver of information disclosure is allowed by the FSC in accordance with Article 30 of

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	or redemption of domestic money market funds ,the Corporation may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors and recognized by the supervisors: (Omitted) When the Corporation acquires or disposes of equipment for business use from or to its subsidiaries, the Board of Directors may delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board meeting.	following matters have been approved by the Board of Directors and recognized by the supervisors: (Omitted) When the Corporation acquires or disposes ofmachinery and equipment for business use from or to its subsidiaries, the Board of Directors may delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board meeting.	“Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the FSC. Paragraph 2 is amended in accordance with the amendment of subparagraph 5 of Article 3.
	Article 14 Where the Corporation acquires a real property from a related party, the reasonableness of the costs of the transaction shall be evaluated in accordance with the following methodology: (Omitted) Where the Corporation acquires real property from a related party, in addition to evaluating the cost of the real property pursuant to the stipulations of paragraphs 1 and 2, accountants must also be engaged	Article 14 Where the Corporation acquires a real property from a related party, the reasonableness of the costs of the transaction shall be evaluated in accordance with the following methodology: (Omitted) Where the Corporation acquires real property from a related party, in addition to evaluating the cost of the real property pursuant to the stipulations of paragraphs 1 and 2, accountants must also be engaged	Subparagraph 3 of paragraph 4 is amended in accordance with the changes in subparagraph 3 , paragraph 4 of Article 15 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the FSC.

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	to audit such a cost and to express their specific opinions. Where one of the following conditions is true, the stipulations of the three foregoing paragraphs shall not be applicable: 1.Where the related party acquired the real property through inheritance or as a gift. 2.Where the date on which the related party entered into the agreement to acquire the real property precedes the date of the contract for the current transaction by more than five years. 3.Where real property was acquired through entering into a joint development contract with a related party, or through engaging a related party to build real property, either on the company's own land or on rented land.	to audit such a cost and to express their specific opinions. Where one of the following conditions is true, the stipulations of the three foregoing paragraphs shall not be applicable: 1.Where the related party acquired the real property through inheritance or as a gift. 2.Where the date on which the related party entered into the agreement to acquire the real property precedes the date of the contract for the current transaction by more than five years. 3.Where real property was acquired through entering into a joint development contract with a related party.
	Article 17 The Corporation shall take the following principles and strategies for risk management and auditing matters when engaging in derivatives trading: 1. Trading principles and strategies: (1) Operating or hedging strategies:	Article 17 The Corporation shall take the following principles and strategies for risk management and auditing matters when engaging in derivatives trading: 1. Trading principles and strategies: (1) Operating or hedging strategies:	Text revised in accordance with the implement of International Financial Reporting Standards (IFRSs).

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Trade in derivative instruments Trade in derivative instruments engaged in by the Corporation is engaged in by the Corporation is limited to non-trade purposes, and limited to non-trade purposes, and under the principle of hedging under the principle of hedging against risk. All related against risk. All related organizations must confirm their organizations must confirm their operations in accordance with the operations in accordance with the authorized regulations, and authorized regulations, and attention must be paid to risk attention must be paid to risk management and to making management and to making periodic assessments. periodic assessments. (2) Types of derivatives that may (2) Types of derivatives that may be traded: At present the be traded: At present the Corporation’s trade in derivative Corporation’s trade in derivative instruments is limited to hedge instruments is limited to hedge trades which fit in with the needs trades which fit in with the needs of our business, such as foreign of our business, such as foreign exchange futures, currency swaps exchange futures, currency swaps and interest rate swaps. and interest rate swaps. (3) Segregation of duties: (3) Segregation of duties:

  Finance Department: The Finance Department: The Finance department is the Finance department is the operational unit engaging in the operational unit engaging in the trade of derivative instruments, trade of derivative instruments, and needs to be aware of the and needs to be aware of the Corporation’s overall position Corporation’s overall position and financial trends here and and financial trends here and abroad at all times. It engages in abroad at all times. It engages in trades at the appropriate times trades at the appropriate times within the authorized monetary within the authorized monetary limits, and keeps abreast of cash limits, and keeps abreast of cash flow for trades that have already flow for trades that have already occurred as a means of lowering occurred as a means of lowering future delivery risks. The future delivery risks. The Finance Department must submit Finance Department must submit all trading certificates and related all trading certificates and related

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information to the Accounting Department to be entered into the accounts.  Accounting Department: The Accounting Department must keep accounts based on all certificates submitted by the Finance Department according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers. (4) Performance evaluation: Following the settlement of accounts at the end of each month, the Cost Department must draw up a statement with the profits and losses for the period created from the actual settlement of trading in derivatives for said period as recorded in the accounts, and provide it to the Vice President of the Finance Division for performance evaluation. (5) Total value of contracts and upper limit for losses:  The maximum total value of foreign exchange futures and currency swap contracts must equal the net position of estimated trades of the Corporation in long-term and short-term foreign exchange. The maximum total value of interest rate swap contracts must equal the total value of long-term debt	information to the Accounting Department to be entered into the accounts.  Accounting Department: The Accounting Department must keep accounts based on all certificates submitted by the Finance Department according to generally accepted accounting principles . (4) Performance evaluation: Following the settlement of accounts at the end of each month, the Cost Department must draw up a statement with the profits and losses for the period created from the actual settlement of trading in derivatives for said period as recorded in the accounts, and provide it to the Vice President of the Finance Division for performance evaluation. (5) Total value of contracts and upper limit for losses:  The maximum total value of foreign exchange futures and currency swap contracts must equal the net position of estimated trades of the Corporation in long-term and short-term foreign exchange. The maximum total value of interest rate swap contracts must equal the total value of long-term debt

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	for the Corporation.  When trading in derivative instruments, the maximum losses for all contracts or for individual contract must not exceed 20% of the value of all contracts or of individual contract. 2. Risk management measures: (Omitted)	for the Corporation.  When trading in derivative instruments, the maximum losses for all contracts or for individual contract must not exceed 20% of the value of all contracts or of individual contract. 2. Risk management measures: (Omitted)
	Article 22 Under any of the following circumstances, the Corporation acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated Website in the appropriate format as prescribed by regulations within two days commencing immediately from the date of occurrence of the fact: 1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches NT$300 million or more; provided, this shall not apply to trading of government bonds, bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds. 2. Merger, demerger, acquisition, or transfer of shares.	Article 22 Under any of the following circumstances, the Corporation acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated Website in the appropriate format as prescribed by regulations within two days commencing immediately from the date of occurrence of the fact: 1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches NT$300 million or more; provided, this shall not apply to trading of government bondsor bonds under repurchase and resale agreements. 2. Merger, demerger, acquisition, or transfer of shares.	Subparagraphs 1 and 4 of paragraph 1 are amended in accordance with the changes in subparagraph , paragraph 1 of Article 30 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” as regulated by the FSC.

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3. Loss from derivatives trading reaching the limit on aggregate loss or loss on individual contract set out in Sub-item 2, Item 5, subparagraph 1 of Article 17 of the Procedures. 4. Where an asset transaction other than any of those referred to in the preceding three subparagraphs or investment in the mainland area reaches NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2)Trading of bonds under repurchase/resale agreements,or subscription or redemption of domestic money market funds. (3)Where the type of asset acquired or disposed isequipment for operating use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million. (4)Where land is acquired under an arrangement for commissioned construction on self-owned land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Corporation expects to invest in the	3. Loss from derivatives trading reaching the limit on aggregate loss or loss on individual contract set out in Sub-item 2, Item 5, subparagraph 1 of Article 17 of the Procedures. 4. Where an asset transaction other than any of those referred to in the preceding three subparagraphs or investment in the mainland area reaches NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2)Trading of bonds under repurchase/resale agreements. (3)Where the type of asset acquired or disposed is equipment/machinery for operating use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million. (4)Where land is acquired under an arrangement for commissioned construction on self-owned land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Corporation expects to invest in the

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	transaction is less than NT$500 million. (Omitted)	transaction is less than NT$500 million. (Omitted)

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Agenda 6-proposed by the board of directors

Explanatory note:

To discuss the proposal of releasing the prohibition on Chairman, Mr.Jo-Chi, Tsou from holding the position of Director of China Ecotek Corporation

1. The agenda is proposed in compliance with Paragraph1, Article 209 of the Company Act ： A director who does anything for himself or on behalf of another person that is within the scope of the Company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.

2. Mr. Jo-Chi, Tsou, Chairman of the Board, plans to serve on the Board of China Ecotek Corporation. Information of China Ecotek Corporation is as follows:

Invested Company	Shareholding by CSC	Position to be held concurrently	Business with CSC
China Ecotek Corporation	44.76%	Director	engineering of environmental protection and steel construction

1. Although the Company is related to China Ecotek Corporation in part of its business, products and services provided by these two companies belong to different market segments. The Company may thereby protect its investment rights and benefit from Mr.Jo-Chi, Tsou’s serving in the board of China Ecotek Corporation by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

26

Agenda 7-proposed by the board of directors

Explanatory note:

To discuss the proposal of releasing the prohibition on Director, Mr. Jyh-Yuh, Sung from holding the position of director of Chung-Hung Steel Corporation.

1. The agenda is proposed in compliance with Paragraph1, Article 209 of the Company Act ： A director who does anything for himself or on behalf of another person that is within the scope of the Company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.

2. Mr. Jyh-Yuh, Sung, Director of the Board, plans to serve on the Board of Chung-Hung Steel Corporation. Information of Chung-Hung Steel Corporation is as follows:

as follows:
Invested Company	Shareholding byCSC	Position to be held concurrently	Business with CSC
Chung-Hung Steel Corporation	40.59%	Director	production and trading of steel, magnetic and ceramics magnetic materials; design, production and trading of machinery and spare parts; production, wholesale and retail trade of basic chemical materials

1. Although the Company is related to Chung-Hung Steel Corporation in part of its business, the products and services provided by these two companies belong to different market segments. The Company may thereby protect its investment rights and benefit from Mr. Jyh-Yuh Sung’s serving in the board of Chung-Hung Steel Corporation by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

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Agenda 8-proposed by the board of directors

Explanatory note:

To discuss the proposal of releasing the prohibition on Director, Mr. Horng-Nan, Lin from holding the positions of Chairman of China Ecotek Corporation and Director of Formosa Ha Tinh Steel Corporation.

1. The agenda is proposed in compliance with Paragraph1, Article 209 of the Company Act ： A director who does anything for himself or on behalf of another person that is within the scope of the Company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.

2. Mr. Horng-Nan, Lin, Director of the Board, plans to serve on the Boards of China Ecotek Corporation and Formosa Ha Tinh Steel Corporation. Information of the two companies is as follows:

Invested Company	Shareholding by CSC	Position to be held concurrently	Business with CSC
China Ecotek Corporation	44.76%	Chairman	engineering of environmental protection and steel construction
Formosa Ha Tinh Steel Corporation	5.00%	Director	Integrated steel mill

1. Although the Company is related to China Ecotek Corporation and Formosa Ha Tinh Steel Corporation in part of its business, the products and services provided by these companies belong to different market segments. The Company may thereby protect its investment rights and benefit from Mr. Horng-Nan, Lin’s serving in the board of China Ecotek Corporation and Formosa Ha Tinh Steel Corporation by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

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Agenda 9-proposed by the board of directors

Explanatory note:

Proposal of releasing the prohibition on Director, Mr. Jih-Gang, Liu from holding the positions of Director of Chung-Hung Steel Corporation, CSC Steel Holdings Bhd., CSC Steel Sdn. Bhd., and East Asia United Steel Corporation.

1. The agenda is proposed in compliance with Paragraph1, Article 209 of the Company Act ： A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.

2. Mr. Jih-Gang, Liu, Director of the Board, plans to serve on the Board of Chung-Hung Steel Corporation, CSC Steel Holdings Bhd., CSC Steel Sdn. Bhd., and East Asia United Steel Corporation. Information of the four corporations is as follows:

Invested Company	Shareholding by CSC	Position to be held concurrently	Business with CSC
Chung-Hung Steel Corporation	40.59%	Director	production and trading of steel, magnetic and ceramics magnetic materials; design, production and trading of machinery and spare parts; production, wholesale and retail trade of basic chemical materials
CSC Steel HoldingsBhd.	45.97%	Director	A holding company of CSC SteelSdn. Bhd.
CSC Steel Sdn. Bhd.	45.97%	Director	Production and trading of Cold-rolled product.
East Asia United Steel Corporation	29.04%	Director	The holding company of Sumitomo Metals (Wakayama) – the slab supplierofthe CSC Group.

1. Although the Company is related to the above-mentioned companies in part of its business, the products and services provided by these companies belong to different market segments. The Company may thereby protect its investment rights and benefit from Mr. Jih-Gang, Liu’s serving in the board of these companies by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

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